Securities Assn. Orders 3 Valley Men to Pay Fines
In two separate disciplinary actions disclosed this month, the National Assn. of Securities Dealers has fined three San Fernando Valley area men a total of $100,000 for violating association rules in selling and promoting various investment programs.
The NASD is a self-regulatory group made up of securities broker-dealers and underwriters who promise to follow association rules. The NASD, probably best known for owning the automated NASDAQ computerized stock-quote service, has the authority to discipline members.
Two of the men, Roman Celusta, 40, of Simi Valley, and Barry R. Willis, 36, of Canoga Park, were accused by the NASD of teaming together and using fraud and deception to solicit $1.1 million from 42 investors for use in trading stock-index options. The NASD said the two men paid themselves more than $96,221 using investors’ money without telling their clients.
Traded Options
Index option investors bet on the future direction of the stock market by buying contracts.
The NASD added that the two men failed to tell investors the returns that were promised hinged on how successful they were at trading the index options.
Celusta and Willis were each fined $45,000, ordered to give up the $96,221 and barred from working for a NASD member, which might include a brokerage or financial services firm.
Neither Celusta nor Willis could be reached for comment, but both have previously denied the allegations.
Began Company
According to the NASD order, Celusta and Willis formed a company called Profit Planners in Woodland Hills while they were working as sales representatives at the Bateman, Eichler Hill Richards brokerage office in Woodland Hills in 1984.
The NASD said they set up an account at Bateman, Eichler and disclosed it to officials there, but the two men did not inform the company that they intended to use money from other investors. The two men left Bateman, Eichler in 1985 after officials there would not accept such an account, the NASD said. The account was transferred to an unrelated office in Nevada, where it closed in October, 1985, “after severe trading losses which depleted the capital of the corporation,” the NASD said.
A Sherman Oaks couple, Allan and Joanne Cohen, sued Profit Planners, Celusta and Willis for fraud in Van Nuys Superior Court. The claim that they lost $55,000 investing in Profit Planners programs.
$10,000 Fine
Separately, the NASD said that the U.S. Securities and Exchange Commission has affirmed sanctions it ordered in December, 1985, against Jack Donald Prosen, 69, Sherman Oaks. He was fined $10,000, ordered to give up $31,349 he allegedly received for referring clients to another investment promoter and was barred from working for a NASD member for 30 days.
Those punished by the NASD can appeal to the SEC for review.
The NASD said Prosen was involved in promoting the sale of limited partnerships without giving written notice to Prudential-Bache Securities, where he was working in 1980 as a salesman.
Prosen could not be reached for comment, but he previously argued before the NASD that he did not solicit people to invest in the partnerships. Instead, he said, he only referred clients as potential investors to Richard M. Silverstein, a La Jolla man who formed the partnerships and sold them from 1979 to 1982.
The NASD concluded, however, that Prosen recommended the partnerships as good investments to clients and received substantial amounts of money from Silverstein for doing so.
