THE JOHN SCHMITZ STORY. Part 1 of 3
Dear Scottoo, Perhaps the quietude that you speak of is the calm before the storm?
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Eighteen months ago a Newsday article, TROUBLED LEGACY / NOTORIOUS LI FIRM IS GONE BUT SOME OF ITS BROKERS LINGER ON, by Susan Harrigan, detailed the ongoing misconduct of three former Stratton Oakmont brokers. I find two quotes seemingly appropriate in the context of this posting:
"When a boiler-room operation is closed, often after lengthy proceedings, it is unfortunately common for the employees to show up in a host of new firms. Not unlike a grade-B science fiction movie, killing one of the monsters only seems to create a new army of them." - Sen. Susan Collins (R-Maine), chairman of the Permanent Subcommittee on Investigations, at a hearing on small-stock fraud [in 1997];
"You step on a place like [ brokerage name deleted ] and it works like mercury, a lot of little balls roll in every direction." - Seth Lipner, a Garden City lawyer who represents investors.
The theory of course is that people who have worked at brokerages so bad they were closed for fraud are steeped in dubious sales methods and will continue them at new firms, wittingly or not, undoing the effort it took to close their original employers. It's like changing the zebra's stripes; you can paint over them, but they are always there. Fortunately, the NASD has seen fit to go after an increasing number of brokers in recent years.
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The last time I checked PABN's web site was about a month ago(it was still down this morning). John Schmitz, Charles Vaccaro, and Warren Dave Williams were listed as officers of the company, even though many believe that Williams has been out of the picture for months. Let's see... how many months does it take for PABN to update its list of officers...? [Sorry, bad joke.]
Vaccaro and Williams have been the subject of numerous posts, but very little factual information has been presented in this discussion group about Schmitz, thus the purpose of this lengthy post.
The following information is compiled from public records and databases of Suffolk County New York Judgments, Liens and Civil Filings, news wires, the NASD, the SEC, the New York State Banking Department, New York corporate records, and the records in the Investor Protection and Securities Bureau of the New York Attorney General's Office. Below is a summary of what I found, in chronological order.
JOHN A. SCHMIDT, age 44, lives in Suffolk County, New York. He is the President / CEO of PanAmerican Bancorp.
In the mid-1980s John Schmitz worked for Life Planning, Inc. in Garden City. Life Planning was a registered broker-dealer engaged in the business of selling packaged financial products to financial consulting clients of its registered representatives. The majority of its 250+ representatives were part time, and were independent financial consultants. [Life Planning later became Global Capital Securities.] At some point in this employment Schmitz has business dealings with a gentleman by the name of Robert Fallah. Schmitz, Fallah, and Life Planning are named in a suit that results in a judgment (no. 252489) against Schmitz for about $12,000.
The IRS liens Schmitz in 1986 for $18,587. Lien no. 51436 is released the following year.
In the late 1980s Schmitz is employed by Fielding Group Securities of Melville.
New York corporate records show that Schmitz incorporates himself in 1988 at 555 Broadhollow Road, Melville.
Schmitz renews his relationship with Robert B. Fallah in 1989. Fallah, along with Todd Spehler, was operating as Robert Todd Financial Corp., a small-stock firm with offices in Garden City and Syosset. While he was with this employer Schmitz is involved in two notable cases, one which resulted in a $27,700 judgment (docket no. 00000441590), and another, more egregious violation, resulting in a judgment in excess of $120,000 (index. No 006358).
Robert Todd Financial Corp. lost its NASD membership in April, 1995, after it had amassed a long record of lost customer arbitrations and lost its license in several states.
Part 2 will be posted shortly. [WARNING to Readers enjoying the euphoria of self-delusion: you may wish to engage the ignore button.]
PatP |
