ceo fred loses nasd license
e) Fredric W. Rittereiser ("Rittereiser") is the Chairman of the Board and Chief Executive Officer of the Reporting Person. Rittereiser served as a President of Sherwood Capital Corp. ("Sherwood"), a broker-dealer in securities from February, 1987 through October, 1988. In May of 1993, a former customer of Sherwood brought an action naming as respondents Sherwood, the account executive who had previously serviced the customer's account, the branch manager of the location where the customer's account had previously been maintained and Rittereiser, as President of Sherwood. The customer alleged that as a result of the account executive having made unsuitable investment recommendations, he had incurred losses for which Sherwood, the branch office manager and Rittereiser were jointly and severally liable as a result of their alleged failure to have properly supervised the account executive.
In August of 1993, the customer and Sherwood executed a release and settlement agreement which provided, in pertinent part, that the customer would withdraw all claims that had been asserted against Sherwood and its affiliated parties (including former officers) and that the customer would release Sherwood and such affiliated parties from all further claims.
Based in part on Rittereiser's belief that as an officer he was an affiliated party of Sherwood who was indemnified and therefore covered by the release and settlement agreement, as well as the fact that Rittereiser was not served with a copy of the customer's statement of claim, Rittereiser did not respond to the customer's allegations. In April of 1994, notwithstanding the release and settlement agreement and the fact that Rittereiser was not then a member of the NASD, a default award was entered against Rittereiser and the other individual respondents in the amount of $33,500 together with the costs in the amount of $1,700 (the "Arbitration Award"). Rittereiser did not pay this Arbitration Award and, as a result thereof, his registration as a member of the NASD was suspended on or about September of 1994. Rittereiser retained counsel for the purpose of setting aside or otherwise rescinding such suspension.
On October 24, 1996, the Arbitration Award was set aside and vacated with respect to Rittereiser, by Order of the Supreme Court of the State of New York, Fredric W. Rittereiser v. Dennis James Karol, Stipulation Index. No. 116385/96. On December 3, 1994, the NASD suspension of Rittereiser was lifted, due to the New York court's order to vacate.
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