First Fraud Verdict Against Asensio
Q. Who was Norman Murphy?
A. A client of Asensio when he worked at a brokerage firm called
Steinberg and Lyman. Murphy filed a lawsuit against them in 1988.
Q. Did the case go to trial?
A. Yes. In 1989, a jury in Martin County, Florida, found in favor of Murphy. Asensio was ordered to pay Murphy $248,250 for fraud and deceit. (Click here for the actual court documents [200 KB], which are somewhat difficult to read.)
Q. Did the verdict affect Asensio's license to work in the brokerage industry?
A. Apparently not. Four years later, he obtained a higher-level license as a broker-dealer and opened Asensio & Company.
Q. Is it unusual to be licensed as a broker-dealer after a fraud verdict as large as this one?
A. One would think so. The site has not been able to determine whether precedent actually exists to grant a license under such circumstances.
Q. Might NASD have been unaware of the verdict when it granted the broker-dealer license?
A. Public Disclosure files on brokers and brokerage firms are available that disclose disciplinary events, verdicts, bankruptcies, and the like. Neither of Asensio's files mentions the verdict.
It's possible that Asensio reported the verdict as required, but was able to get it removed from his NASD file after convincing a judge to set the verdict aside. In 1998, Asensio obtained a court order setting the verdict aside because the process server who delivered the lawsuit to him ten years earlier was not properly licensed.
However, it's unclear that NASD would recognize a technicality such as this as sufficient grounds to expunge a fraud verdict from the public disclosure file.
Simply stated, the other possibility is that Asensio concealed the verdict on his broker-dealer application. He does deny the lawsuit elsewhere. For example, a sworn affidavit [480 KB] signed in 2001 asserts that he has never had a customer complaint at any time in his career (paragraph #3 of affidavit).
Q. What if the verdict was concealed from NASD before
it was set aside in 1998?
Article 3, Section 4 of the NASD By-Laws states:
A person is subject to a "disqualification" with respect to membership, or association with a member, if such person:
(f) has willfully made or caused to be made in any application for membership in a self-regulatory organization, or to become associated with a member of a self-regulatory organization, or in any report required to be filed with a self-regulatory organization, or in any proceeding before a self-regulatory organization, any statement which was at the time, and in light of the circumstances under which it was made, false or misleading with respect to any material fact, or has omitted to state in any such application, report, or proceeding any material fact which is required to be stated therein;
The By-laws also provide that:
no member shall be continued in membership if it becomes subject to disqualification; and that no person shall be associated with a member, continue to be associated with a member, or transfer association to another member if such person is or becomes subject to disqualification.
These provisions are known as statutory disqualification. The NASD website provides a readable explanation of this process.
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Update, March 31, 2003
The site has obtained Asensio's application for a broker-dealer license, which was filed four years after the Murphy verdict. It shows he answered no when asked if a court had ever ruled against him on an investment-related matter.
Also newly obtained:
Asensio's complete disciplinary file.
Click here for details of
what he told regulators about the two fraud verdicts against him.
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Update, January,25, 2005
For the complete story
on how Asensio concealed the Murphy verdict from the NASD, see
How Asensio Duped Regulators.
Page Created 11/30/02 • Updated 3/31/03 • 1/25/05