Hollencrest Capital Management, Llc

Allegations: ON DECEMBER 21, 2015, THE NATIONAL FUTURES ASSOCIATION ("NFA") ISSUED A COMPLAINT AGAINST HOLLENCREST AND PETER PELLIZZON ("PELLIZZON"). THE COMPLAINT ALLEGED THAT HOLLENCREST VIOLATED NFA COMPLIANCE RULE 2-2(F) BASED ON COMMUNICATIONS BY A FORMER HOLLENCREST EMPLOYEE, NITA CHARLTON-GOMES ("CHARLTON-GOMES"). CHARLTON-GOMES SENT NFA'S REGISTRATION DEPARTMENT A COPY OF A FABRICATED E-MAIL SHE CLAIMED SHE RECEIVED FROM A NFA EMPLOYEE WHO DID NOT IN FACT EXIST. THIS FABRICATED E-MAIL SHOWED THE NFA'S APPROVAL OF ANOTHER HOLLENCREST EMPLOYEE'S REGISTRATION. CHARLTON-GOMES INITIALLY HID THIS FRABRICATED E-MAIL FROM PELLIZZON AND HOLLENCREST AND THEN REPEATEDLY LIED TO PELLIZZON REGARDING THE FABRICATED E-MAIL WHEN THE NFA QUESTIONED ITS VALIDITY. PELLIZZON AND HOLLENCREST ONLY LEARNED OF THE VIOLATION WHEN THE NFA UNCOVERED THE FABRICATED E-MAIL. CHARLTON-GOMES' DECEPTION CAUSED THE NFA AND HOLLENCREST TO INCUR SIGNIFICANT COSTS TO INVESTIGATE AND RESOLVE THE MATTER. THE COMPLAINT ALLEGED THAT HOLLENCREST AND PELLIZZON DID NOT ADEQUATELY SUPERVISE THE FIRM'S INVESTIGATION OF THE CIRCUMSTANCES SURROUNDING CHARLTON-GOMES' SUBMISSION OF INFORMATION TO THE NFA, IN VIOLATION OF NFA COMPLIANCE RULE 2-G (A). Status: Final Sanction Detail: PAID $125,000 FOR REIMBURSEMENT OF NFA INVESTIGATIVE EXPENSES. Summary: ON OR ABOUT MARCH 16, 2016, HOLLENCREST, WITHOUT ADMITTING OR DENYING, AGREED AS TO A FINDING BY THE BUSINESS CONDUCT COMMITTEE OF THE NFA ("COMMITTEE") THAT HOLLENCREST VIOLATED NFA COMPLIANCE RULE 2-4 BY FAILING TO OBSERVE HIGH STANDARDS OF COMMERCIAL HONOR AND JUST AND EQUITABLE PRINCIPLES OF TRADE IN THE CONDUCT OF ITS COMMODITY FUTURES BUSINESS AND SWAPS BUSINESS. HOLLENCREST FURTHER AGREED TO THE ORDER OF THE COMMITTEE TO PAY COMPENSATION OF A $125,000 REIMBURSEMENT FOR THE NFA'S INVESTIGATIVE COSTS AND TO RESOLVE THE NFA'S CHARGES. SEPARATELY, ON MARCH 24, 2016, BASED ON THE CONDUCT OF CHARLTON-GOMES DESCRIBED HEREIN, NITA CHARLTON-GOMES WAS FOUND BY THE FINANCIAL INDUSTRY REGULATORY AUTHORITY ("FINRA") TO HAVE VIOLATED FINRA RULE 2010. CHARLTON-GOMES CONSENTED TO A LIFETIME BAR FROM ASSOCIATION WITH ANY FINRA MEMBER BROKER-DEALER IN ALL CAPACITIES. IN DECEMBER 2015, CHARLTON-GOMES WAS TERMINATED FROM EMPLOYMENT AT HOLLENCREST. PELLIZZON WAS NOT FOUND TO HAVE VIOLATED ANY NFA OR FINRA RULES AND NO PENALTIES WERE ASSESSED AGAINST HIM.