FINRA

Saliba was named a respondent in a FINRA complaint alleging that by acting as a principal and/or supervisor, he caused his member firm to violate interim restrictions placed on it by FINRA shortly after it filed a Continuing Membership Application (CMA). The complaint alleges that Saliba immediately began violating the interim restrictions by signing numerous engagement agreements obligating the firm to provide investment banking services for clients, hiring the firm's CEO, hiring or participating in hiring other firm personnel, and reviewing the firm CCO's outside brokerage account statements. The complaint also alleges that Saliba made misrepresentations and failed to cooperate with FINRA during his on-the-record testimony and made misrepresentations and failed to provide a complete response to a FINRA request. The complaint further alleges that Saliba provided false information to FINRA by submitting memos which were falsified. In addition, the complaint alleges that he directed an associated individual of the firm to email firm registered representatives from the associated individual's personal Email account and instruct the individuals to backdate forms and return them. After receiving backdated forms from recipients of the Email, the firm's CCO produced these forms to FINRA without revealing that they had been backdated. These actions were done in such a way so as to avoid detection and deceive FINRA. In addition, the complaint alleges that Saliba caused the firm to maintain inaccurate books and records as he knew or should have known that memos maintained by the firm were false.

Decision

Bar (Permanent)

All Capacities

Indefinite

1/8/2019

Hearing Panel Decision rendered 12/15/17, wherein the sanctions were based on findings that Saliba, by acting as a principal, caused his member firm to violate interim restrictions FINRA had placed on it shortly after it filed a CMA. The findings stated that Saliba began violating the interim restrictions by signing engagement agreements to provide investment-banking services for clients, hiring an individual as the firm's CEO, hiring or participating in hiring other firm personnel, and reviewing of a representative's outside brokerage account statements. The findings also stated that Saliba provided false and incomplete information to FINRA in the form of memos. Also, Saliba provided two sets of memos to FINRA in response to a request for information when he knew or should have known that one set of the memos were falsified and/or was not authorized by an individual alleged to have produced the set memos and that the second set of memos were backdated. The findings also included that Saliba gave false testimony during his on-the-record testimony regarding his use of computers for firm business and failed to produce all of the computers he used for firm business in response to FINRA's request. FINRA found that Saliba falsified firm compliance records and submitted them to FINRA. Saliba was aware that another principal at the firm was obtaining backdated compliance forms and he provided his own backdated forms to the principal, knowing the firm would submit it to the FINRA examiners. The Hearing Panel dismissed allegations that Saliba caused the firm to maintain inaccurate books and records. On 1/8/18, Saliba appealed the Decision to the NAC. NAC decision rendered 1/8/19, wherein the findings made are affirmed and the sanctions imposed are modified. Saliba is barred from association with any FINRA member in all capacities for acting as a principal in violation of the interim restrictions imposed by FINRA, barred for failing to cooperate with, and providing false and misleading documents and information to FINRA, and barred for participating in the falsification of compliance forms. The NAC also ordered that Saliba pay, jointly and severally, appeal costs of $1,733.28. The bar is in effect pending finality. On 2/6/19, Saliba appealed the decision to the SEC. SEC decision rendered 4/9/21, wherein the findings made and the sanctions imposed are sustained in part and remanded in part. The SEC remanded to FINRA for further proceedings the finding that Saliba provided falsified memos to FINRA. FINRA's imposition of a bar is also remanded. NAC remand decision rendered 10/6/22, wherein the NAC modified the findings made and sanctions imposed. The NAC found that Saliba knew that he was providing falsified memoranda to FINRA. The NAC also found that Saliba knew that he was providing falsified memoranda to FINRA during its investigation. The NAC dismissed the Hearing Panel's findings of violation by Saliba with respect to the second set of memos that were backdated, because the evidence is insufficient as to whether he knew they were false. The NAC barred Saliba from association with any FINRA member in all capacities for falsely testifying about his use of computers for the firm's business and failing to produce all the computers he used for firm business and barred him from association with any FINRA member in all capacities for providing a falsified set of memos to FINRA. On 11/4/22, Saliba appealed the decision to the SEC. The sanctions, except for the bar, are not in effect pending the review. SEC decision rendered 4/11/24 wherein the findings and the sanctions imposed by the NAC are sustained. The decision is final on 6/10/2024.

Mr. Saliba has filed an appeal based on FINRA offering insufficient evidence to prove the allegations. Mr. Saliba did not violate the Interim Restrictions, and was under the constant and direct supervision of the Firm's CEO and CCO. He neither knew nor had reason to know that any documents he submitted to FINRA in response to an 8210 request were not genuine, he did not fail to provide any responsive materials, including computers and no such computer existed or was in Mr. Saliba's possession that contained responsive information, he was unaware that an instruction from a compliance principal to provide a backdated compliance form was made without FINRA's awareness and no such evidence exists or was presented that proves otherwise. The Panel erroneously denied Mr. Saliba's initial motion to sever, which resulted in undue prejudice to him at the hearing. As a result, the Hearing Panel's decision was heavily based on credibility determinations, rather than unrebutted evidence. The Hearing Panel assessed an excessive sanction on Mr. Saliba, failing to properly weigh the facts, evidence and considerations set forth in the FINRA Sanction Guidelines.