WILLIAM BADRY ASSATLY at CELADON FINANCIAL GROUP LLC – View Complaints, Disclosures, Scams and Audit Report (Updated 2023)

Disclosure #1 for WILLIAM ASSATLY

• • eventDate: 4/9/2021
  • Disclosure Type: Regulatory
  • Disclosure Resolution: Final
  • Disclosure Detail :: DocketNumberFDA: 2018056458302
  • DocketNumberAAO: 2018056458302
  • Initiated By: FINRA
  • Allegations: Without admitting or denying the findings, Assatly consented to the sanctions and to the entry of findings that he failed to establish and implement an anti-money laundering (AML) compliance program reasonably designed to detect and cause the reporting of suspicious activity. The findings stated that although Assatly’s member firm’s customer account business had grown to represent nearly a quarter of its revenues, he did not take reasonable steps to establish and implement an AML program tailored to the firm’s new business line, and particularly to the deposits and liquidations of microcap stocks. Assatly did not use any exception reports or automated tools to monitor customer account activity for suspicious transactions, including customer transactions in microcap securities. Assatly’s review for potentially suspicious transactions was limited to a manual review of the transactions. This manual review was unreasonable given that Assatly had no experience with customer account business and no training in reviewing for AML red flags in customer accounts. The firm’s failure to implement an AML program reasonably tailored to its new business lines resulted in Assatly failing to identify or investigate potentially suspicious transactions. The firm’s clearing firm contacted Assatly noting that trading in certain microcap securities was a significant percentage of the overall market volume for the day and calling one of the customer’s higher risk. Despite these red flags, Assatly did not investigate why an owner might open multiple accounts to liquidate the same microcap security. Nor did he monitor the accounts any differently. When the clearing firm contacted the firm about suspicious trades that had not been flagged by the firm, Assatly did not make any efforts to tailor the firm’s AML program to the firm’s new business line following these notifications. Indeed, multiple customers with limited or no assets in their accounts received shares of microcap securities, liquidated some or all of the securities, and withdrew funds shortly after liquidation. Assatly did not identify or detect these red flags through his manual review. The findings also stated that Assatly failed to establish and maintain a supervisory system reasonably designed to achieve compliance with Section 5 of the Securities Act of 1933 (Securities Act). Assatly failed to ensure that the firm had a reasonable supervisory system in place to avoid becoming a participant in the unregistered sale of securities. In addition, Assatly failed to ensure that reasonable inquiries were conducted to determine whether securities deposited into customer accounts for resale were registered or exempt from registration. Assatly repeatedly permitted deposits and resales of microcap securities despite missing documentation, such as proof of payment, appropriate legal opinions and other documents critical to determining whether microcap securities deposited were freely tradeable, and failed to follow-up with customers to ensure that required questions on deposit forms were answered correctly. Further, Assatly did not reasonably review the documentation associated with microcap deposits, missing multiple red flags in the documentation.
  • Resolution: Acceptance, Waiver & Consent(AWC)
  • SanctionDetails :: Sanctions: Civil and Administrative Penalty(ies)/Fine(s)
  • SanctionDetails :: Amount: $5,000.00 Sanctions: Suspension
  • SanctionDetails :: Registration Capacities Affected: Any principal capacity
  • Duration: two months
  • Start Date: 5/3/2021
  • End Date: 7/2/2021