PAUL JOSEPH JACOBS is currently employed as a Broker and/or Investment Adviser at CAPE SECURITIES INC. located at 401 Congress Avenue, Suite 1540, Austin, TX, 78701.
PAUL JOSEPH JACOBS has worked at CAPE SECURITIES INC. since February 16, 2017
Disclosure History
PAUL JOSEPH JACOBS has 4 Disclosure Event(s).
Date: December 31, 2015 Category: Regulatory Initiated By: FINRA Allegations: Jacobs was named a respondent in a FINRA complaint alleging that he failed to establish and maintain a system to supervise the activities of his firm that was reasonably designed to achieve compliance with applicable securities laws and regulations and NASD/FINRA rules. The complaint alleges that Jacobs failed to monitor for, detect and, when detected, investigate multiple instances of potential misconduct by the firm's brokers involving unsuitable active trading investment strategies, unsuitable ETFs, discretionary trading without written authorization and excessive trading/churning in multiple customer accounts across multiple branches of the firm. In addition, Jacobs failed to implement a reasonable supervisory system to adequately review trades for unsuitable recommendations, such as ETFs, and to adequately monitor whether the firm's representatives understood the risks and benefits of the active trading investment strategy they were recommending, nor did the firm monitor whether the representatives had done any due diligence on the recommended active trading investment strategy. This grossly inadequate supervisory system established, in turn, resulted in many firm customers suffering significant losses and paying staggering commissions and fees. The complaint also alleges that Jacobs failed to establish, maintain, and enforce WSPs to supervise its business that were reasonably designed to achieve compliance with applicable securities laws and regulations and NASD/FINRA rules. The firm did not establish, maintain and enforce written procedures to supervise its representatives' recommendations of active and aggressive trading investment strategies to many of its customers in multiple branches. The firm failed to establish, maintain and enforce written procedures to ensure that reduced sales charges were applied for mutual funds where applicable in accordance with the fund's right of reinvestment/right of reinstatement provisions. The complaint further alleges that Jacobs failed to identify customer complaints and none of these complaints were reported to FINRA in accordance with applicable rule. Resolution: Decision & Order of Offer of Settlement SanctionDetails: Sanctions: Suspension SanctionDetails:Registration Capacities Affected: any principal capacity Duration: six months Start Date: 9/6/2016 End Date: 3/5/2017 Regulator Statement: Without admitting or denying the allegations, Jacobs consented to the sanctions and to the entry of findings that while serving as a principal of his member firm, he failed to establish and maintain a system to supervise the activities alleged that was reasonably designed to achieve compliance with applicable securities laws and regulations and NASD/ FINRA rules. The findings stated that Jacobs' firm, by and through one or more of its registered representatives and principals, put profits before customers, growth before compliance and subterfuge before transparency. Jacobs failed to monitor for, detect and, when detected, investigate multiple instances of potential misconduct by the firm's brokers involving unsuitable active trading investment strategies, unsuitable ETFs, discretionary trading without written authorization and excessive trading/churning in multiple customer accounts across multiple branches of the firm. Jacobs took no meaningful steps to monitor for excessive trading or churning, other than to review a limited number of trades in isolation on a daily basis through order tickets and trade blotters. In addition, Jacobs failed to implement a reasonable supervisory system to adequately review trades for unsuitable recommendations, such as ETFs, and to adequately monitor whether the firm's representatives understood the risks and benefits of the active trading investment strategy they were recommending, nor did his firm monitor whether the representatives had done any due diligence on the recommended active trading investment strategy. As a result of the grossly inadequate supervisory system established by Jacobs, the firm and another principal, the firm's brokers made unsuitable recommendations to customers to purchase and hold ETFs, engaged in discretionary trading without written authorization, excessively traded and churned accounts, and made unsuitable recommendations to customers to engage in an active trading investment strategy. This misconduct, in turn, resulted in many of the firm's customers suffering significant losses and paying staggering commissions and fees. The findings also stated that Jacobs failed to establish, maintain and enforce WSPs to supervise the firm's business that were reasonably designed to achieve compliance with applicable securities laws and regulations and NASD/FINRA rules. Broker Comment: Without confirming or denying any allegation in the AWC, which was based on findings related to Caldwell International Securities Corporation (CISC) for a 4 year and 3 month time period (December 1, 2010 through Apr 30, 2015), during which I was the CCO for the last 11 months.
Date: May 13, 2012 Category: Criminal Charges: ASSAULT ON A PEACE OFFICER - 3RD DEGREE FELONY Disposition: Dismissed
Date: July 15, 2008 Category: Financial Type: Compromise Disposition: Satisfied/Released
Date: February 06, 2007 Category: Customer Dispute Allegations: THE CLIENT ALLEGED UNSUITABLE TRADES AND FAILURE TO EMPLOY PROPER RISK MANAGEMENT RESULTED IN LOSSES. Damage Amount Requested: $278,701.00 Broker Comment: THE FIRM FOUND THE FORMER ADVISOR DID NOT HAVE ACCESS TO THE CLIENTS ACCOUNTS, CLIENT FILES AND WAS NOT ASSIGNED TO THE ASSIGNED TO THE CLIENT DURING THE TIME OF THE ALLEGED TRADES AND LOSSES. ADDITIONALLY, THE ADVISOR LEFT THE FIRM FROM 4/10/2006. GIVEN THIS FIRM WAS UNABLE TO SUBSTANTIATE THE CLIENTS CLAIMS.
More Information
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A disclosure includes information about customer disputes, disciplinary events and financial matters on the broker's record as reported by securities regulators, the individual broker, and any involved firms. Some of these items may involve pending actions or allegations that have not been resolved or proven. The presence of a disclosure does not automatically indicate any wrongdoing.
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