David Michael Isabella (CRD # 2515834, Registered Representative, Hilton, New York) submitted an Offer of Settlement in which he was barred from association with any FINRA member in any capacity. Without admitting or denying the allegations, Isabella consented to the described sanction and to the entry of findings that he fraudulently induced customers, most of whom were retired or nearing retirement, to entrust him with their retirement savings and purchase securities from him by promising that he could achieve sustained annual rates of return of at least 10 percent each and every year, which would allow for consistent annual withdrawal, ranging from 7 percent to 13.5 percent from their investment portfolios without depletion of principal. The findings stated that many of the customers relied on Isabella’s fraudulent representations when determining to invest their retirement funds with him, and based their decision to retire sooner than they had otherwise planned, at least in part, upon the representation that they would receive enough monthly income from their retirement accounts to live on for the rest of their lives. The findings also stated Isabella made unsuitable investment recommendations and effected transactions in customers’ accounts without having reasonable grounds for believing that the transactions were suitable for the customers in view of the over-concentration in equities, the related fees incurred, and in light of the customers’ financial situations, investment objectives and needs. The findings also included that Isabella’s promised returns and withdrawal rates proved to be unsustainable, resulting in the depletion of the customers’ retirement savings and forcing some to return to employment. FINRA found that Isabella falsified records maintained by his member firm concerning his customers’ financial situations and goals, and as a result, the customers did not receive the firm’s promised benefit of having an investment manager selected based on their individual needs and financial situations. FINRA also found that Isabella inappropriately obtained confidential contact and employment information about a company’s employees, without their knowledge, authorization or consent, from personnel in the company’s human resources and other departments, and rewarded the contacts for their assistance with gifts. In addition, FINRA determined that Isabella used a false professional designation on correspondence with customers. FINRA further found that Isabella provided false testimony during a FINRA on-the-record interview. (FINRA Case # 2006005132303)

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