UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934

Release No. 34-99331/ January 11, 2024 

In the Matter of the Application of the

Financial Industry Regulatory Authority, Inc.

(“FINRA”)

For an Order Regarding FINRA’s Approval of 

the Proposed Association of William John 

Tobias as a Non-Registered Individual With

Hold Brothers Capital LLC

Securities Exchange Act of 1934 

Sections l5(b), 15A(g)(2) and 19(h)

ORDER GRANTING FINRA’S 

APPLICATION FOR RELIEF 

FROM CERTAIN STATUTORY 

DISQUALIFICATION 

FINRAhas filed an application (“Application”) with the Securities and Exchange

Commission (“Commission”) seeking an order, pursuant to Rule 19h-1(d) of the Securities 

Exchange Act of 1934 (the “Exchange Act”). The Application concerns FINRA’s approval 

of the proposed association of William John Tobias, a person subject to a statutory

disqualification, as a non-registered individual performing part-time accounting work for 

Hold Brothers Capital LLC (“HBC” or “Firm”), subject to heightened supervisory 

procedures.1 More specifically, FINRA’s Application seeks an order declaring that, 

notwithstanding Mr. Tobias’s statutory disqualification, the Commission will not (1) institute 

proceedings pursuant to Sections 15(b) and 19(h) of the Exchange Act on the basis of Mr. 

Tobias’s proposed association with the Firm and (2) otherwise direct FINRA to bar Mr. Tobias’s 

proposed association with the Firm pursuant to Section 15A(g)(2) of the Exchange Act. This 

order grants FINRA’s Application. 

I. Background

A. Statutory Disqualification

As set forth in the Application, Mr. Tobias is subject to a statutory disqualification as a 

result of the Commission’s September 25, 2012, administrative order (“2012 Commission 

Order”), which found that Mr. Tobias and other respondents willfully aided and abetted and 

1 FINRA filed the Application seeking relief via a notice, pursuant to Rule 19h-1 of the 

Exchange Act. See Application at 9. All representations, terms, and conditions of 

employment contained in FINRA’s Rule 19h-l notice filing (which includes HBC’s MC400 Application to FINRA), including anything that is not specifically discussed in this 

order, are incorporated herein by reference. 
2

caused respondents Demostrate, LLC (“Demostrate”), Trade Alpha Corporation, Ltd (“Trade 

Alpha”), and Hold Brothers On-Line Investment Services, LLC (“Hold Brothers On-Line”)

2

to 

violate Section 9(a)(2) of the Exchange Act.

3

 

Specifically, as FINRA summarizes, from January 2009 through September 2010, Mr. 

Tobias and other respondents became aware of red flags that overseas traders, who traded 

through accounts held at Hold Brothers On-Line by Demostrate and Trade Alpha, were engaging 

in a manipulative trading strategy known as “layering” or “spoofing.”

4

 FINRA notes that despite 

the red flags, which included concerns from exchanges and FINRA regarding manipulative 

trading occurring at Hold Brothers On-Line, Mr. Tobias and other respondents continued to 

provide the overseas traders with trading capital, access to trading platforms, and the ability to 

access U.S. markets, and failed to conduct adequate follow-up despite the red flags.5 In the 

application submitted to FINRA, Mr. Tobias states that he has “learned the lessons of these 

events and truly regret any historic failures on my part.”

6

 

2

See Application at 1-2. According to FINRA, Trade Alpha is an affiliate under common 

control with the Firm. The Firm has no active relationship with Trade Alpha and the 

Firm represents that Mr. Tobias will have no responsibilities at the Firm relating to Trade 

Alpha. See Application at n.1. At the time of the misconduct underlying the 2012 

Commission Order, Mr. Tobias served as the managing member of Demostrate. The 

Firm represents that it has no active relationship with Demostrate and that Mr. Tobias 

will have no involvement with or responsibility for Demostrate. See id.

Further, pursuant to the 2012 Commission Order, the Commission imposed upon Hold 

Brothers On-Line a civil penalty, plus interest, totaling $1,896,785 and ordered that it 

disgorge $638,452. FINRA’s Central Registration Depository (“CRD”) shows that Hold 

Brothers On-Line also agreed to pay fines to various self-regulatory organizations

(“SRO”), including FINRA, in connection with the misconduct underlying the 2012 

Commission Order. See id. However, Hold Brothers On-Line failed to pay FINRA and 

as a result, FINRA expelled it in late 2012. See id.

3

See In the Matter of Hold Brothers On-Line Investment Services, LLC, Demostrate, LLC, 

Trade Alpha Corporate, Ltd, Steven Hold, Robert Vallone, and William Tobias, Admin.

Proc. File No. 3-15046, Exchange Act Release No. 67924, Investment Company Act

Release No. 30213 (September 25, 2012).

4

See Application at 2.

5

See id.

6

See id. According to FINRA, in May 2014, Mr. Tobias resolved a complaint brought by 

the New Jersey Bureau of Securities for the same misconduct as that underlying the 2012 

Commission Order. Mr. Tobias’s registration was suspended for three years concurrent 

with the 2012 Commission Order’s temporal bar, after which time he could reapply for 

registration upon demonstrating that he had complied with all provisions of the 2012 

Commission Order and would be subject to a heightened supervisory plan. Mr. Tobias 

was also fined $12,500, which he paid. See id. at n.3.
3

Additionally, the 2012 Commission Order bars Mr. Tobias from association with any 

broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, 

or nationally recognized statistical rating organization; prohibits him from serving or acting as an 

employee, officer, director, member of an advisory board, investment adviser or depositor of, or 

principal underwriter for a registered investment company or affiliated person of such investment 

adviser, depositor, or principal underwriter; and bars him from participating in any offering of a 

penny stock, including: acting as a promoter, finder, consultant, agent or other person who 

engages in activities with a broker, dealer or issuer for purposes of the issuance or trading in any 

penny stock, or inducing or attempting to induce the purchase or sale of any penny stock for a 

period of three years, with the right to reapply thereafter.7

In addition to the bar, the 2012 Commission Order ordered Mr. Tobias to cease and desist 

from committing or causing any violations and any future violations of Exchange Act Section 

9(a)(2) and imposed a $75,000 civil penalty, which Mr. Tobias paid.8

As set forth in the Application, the findings of willful aiding and abetting contained in the 

2012 Commission Order subject Mr. Tobias to a statutory disqualification under Section 

3(a)(39)(F) of the Exchange Act, which incorporates by reference Section 15(b)(4)(E) of the 

Exchange Act.

9

 Additionally, the Application explains that the bar subjects Mr. Tobias to a 

statutory disqualification under Section 3(a)(39)(B) of the Exchange Act.10

B. Mr. Tobias’s Industry Background

According to FINRA, Mr. Tobias first entered the securities industry in June 1995, when 

he registered as a general securities representative.11 He also registered as an introducing brokerdealer financial and operations principal in May 1999, an equity trader in January 2000, and a 

financial and operations principal (“FINOP”) in November 2003. Mr. Tobias passed the uniform 

securities agent state law examination in June 1995.12 Currently, all of Mr. Tobias’s brokerdealer registrations have expired.13

 Previously, Mr. Tobias was associated with multiple FINRA

member firms. In particular, he was associated with Hold Brothers On-Line from August 2012 

until September 2012, from April 2003 until January 2005, and from May 1995 until April 

2001.14 Mr. Tobias has not been associated with a broker-dealer since September 2012.15

7

See 2012 Commission Order at 12.

8

See Application at 2.

9

See id. at n.2.

10

 See id.

11 See id. at 3.

12 See id.

13 See id.

14 See id.; see also December 14, 2022 Correspondence with FINRA Staff.

15 See Application at 3.
4

According to the Application, the Firm states that since the 2012 Commission Order, Mr. 

Tobias initially worked as an accountant for an accounting firm.16 After he became licensed as a 

certified public accountant, he has worked in that capacity for, and is a partner in, the accounting 

firm.17 FINRA notes that the record shows that Mr. Tobias is otherwise in good standing and has 

had no enforcement, non-compliance, or disciplinary actions brought against him.18

FINRA further notes that, other than the 2012 Commission Order and the New Jersey 

matter described above, the record shows no other disciplinary or regulatory proceedings, 

complaints, or arbitrations against Mr. Tobias.19

C. The Firm

According to FINRA, HBC has been a FINRA member since July 2016 and is based in 

New York City.20 It has one Office of Supervisory Jurisdiction and 60 non-registered office 

locations.

21

 HBC employs 47 registered representatives, eight registered principals, and six nonregistered fingerprinted individuals.22 It does not employ any other statutorily disqualified 

individuals.23

FINRA also notes that it completed HBC’s most recent examination in 2020. This 

examination resulted in a March 2020 Cautionary Action for the following exceptions: (1) failing 

to file and maintain an accurate Form BD because it did not list all entities engaging in a 

securities business that the Firm controlled or were under common control with the Firm; (2) 

failing to perform a Business Continuity Plan test on an annual basis and failing to include in its 

testing all required elements; (3) failing to maintain the Firm’s financial and operations records 

in the format specified by Exchange Act rules; (4) failing to have adequate supervisory controls 

over its general ledger entries and its wire release process; and (5) failing to maintain adequate 

controls to ensure that the Firm did not withdraw funds from its customer reserve account to pay 

operating expenses. The Firm responded in writing to the exceptions noted in the Cautionary 

Action.24

16 See id.

17 See id.

18 See id.

19 See id. at 3.

20 See id. 

21 See id.

22 See id.; see also December 14, 2022 Correspondence with FINRA Staff.

23 See Application at 3.

24 See id. at 3-4.
5

According to FINRA, the record shows no other recent regulatory or disciplinary actions 

against HBC.25

II. Proposed Business Activities and Supervision

According to FINRA, HBC proposes to employ Mr. Tobias part-time as a non-registered 

individual out of its home office in New York City, although he may be permitted to work 

remotely several days a week.26 HBC proposes Mr. Tobias will assist with accounting work, 

such as taxes, bookkeeping, billing, and analyses of payouts to traders and vendor payments.27 

Mr. Tobias will not have any customers, be assigned to any customer accounts, and will not 

engage with customers.28 

Mr. Tobias will be supervised by Ilan Lessick, HBC’s Executive Vice President of 

Operations and Finance.29 Mr. Lessick oversees HBC’s accounting and financial matters. Mr. 

Lessick has been associated with HBC since April 2021.30 Mr. Lessick first registered as a 

general securities representative in August 2000, as a general securities principal in May 2002, 

and as a FINOP in June 2003.31 He also passed the uniform securities agent state law 

examination in December 2000.32 He currently works from HBC’s New York City office and 

supervises three other individuals.33

25 See id. at 4. According to FINRA, CRD shows that from 2012 through 2015, the Firm 

settled three matters against it brought by other SROs for failing to: (1) retain instant 

messages in the required format, evidence senior management approval of its AntiMoney Laundering (“AML”) Program, and obtain AML attestations from its associated 

persons; (2) register Firm officers as proprietary trading principals, provide notification 

of a new FINOP and register its previous FINOP, and establish written supervisory 

procedures that were relevant to the nature of its business; and (3) establish, document, 

and maintain a risk management system and supervisory procedures reasonably designed 

to manage the risks of the Firm’s business activities, conduct an annual review and 

document its annual review, and maintain a chief executive officer certification. The 

Firm paid a total of $65,000 in fines and agreed to several undertakings in connection 

with these matters. See id. at n.4.

26 See id. at 4.

27 See id.

28 See id.

29 See id.

30 See id. at 4-5.

31 See id. at 4.

32 See id.

33 See id.
6

The Application sets forth that Robert Ricca, HBC’s Chief Compliance Officer, will act 

as Mr. Tobias’s alternate supervisor in the event that Mr. Lessick is unavailable.34 Mr. Ricca has 

been associated with HBC since January 2016.35 Mr. Ricca first registered as a general securities 

representative in May 2002, as a general securities principal in November 2007, as a municipal 

securities principal in June 2008, as a registered options principal in May 2010, as a research 

analyst in December 2010, and as a securities trader representative in March 2016.36 He also 

passed the uniform securities agent state law examination in October 2002.37 He works from 

HBC’s New York City office and supervises two individuals.

38

 

FINRA additionally notes that Mr. Lessick and Mr. Ricca have no regulatory or 

disciplinary histories and collectively have more than 47 years of industry experience.39

FINRA further states that based upon the record it found HBC’s proposed heightened 

supervision plan sufficiently stringent.40 According to the Application, HBC proposes the

following procedures of heightened supervision for Mr. Tobias:

1. The written supervisory procedures for HBC will be amended to incorporate this 

Supervision Plan for the supervision of Mr. Tobias. Mr. Lessick is the primary 

supervisor responsible for Mr. Tobias. Mr. Lessick will sign a copy of the 

Supervision Plan, acknowledging his receipt and acceptance of it.

2. If Mr. Lessick is to be on vacation or out of the office for an extended period, Mr. 

Ricca will act as Mr. Tobias’s interim supervisor.

3. Mr. Tobias will be supervised by Mr. Lessick or Mr. Ricca in the Firm’s main office 

located at One Penn Plaza, New York, New York 10119.41

4. As defined in FINRA Rules 1220(b)(3)(A)(i) and (ii), Mr. Tobias will not act as a 

“covered person” nor perform any “covered functions.”

5. Mr. Tobias will only engage in the following duties at HBC:

34 See id. at 5.

35 See id.

36 See id.

37 See id.

38 See id.

39 See id. at 6.

40 See id. 

41 According to FINRA, the Firm initially represented that because of COVID-19, Mr. 

Tobias might work remotely three days a week. The Firm represents that going forward, 

Mr. Tobias may be permitted to continue to work remotely, in which case Mr. Tobias’s 

supervisors will review his work electronically. See id. at n.5.
7

a. posting and analyzing the Firm’s financial books and records;

b. review and preparation of payroll and tax filings;

c. preparation of assessment reports (e.g., SIPC); and

d. analyzing reports of clearing and routing, revenue, payroll and vendor 

payments.

6. Mr. Tobias will not act in a supervisory capacity.

7. Mr. Tobias will not have any customers, be assigned to any customer accounts, nor 

engage with customers.

8. All of Mr. Tobias’s outgoing emails will be blind copied to Mr. Lessick and reviewed 

by Mr. Lessick on a bi-weekly (i.e., every two weeks) basis. Mr. Lessick will also 

review all of Mr. Tobias’s incoming emails on a bi-weekly basis. Mr. Lessick will 

review any other written correspondence directed to, authorized by, or sent by Mr. 

Tobias on a bi-weekly basis. Records of such reviews will be kept segregated for 

ease of review during any FINRA examination.

9. Mr. Tobias will not be permitted to use any email address other than the Firm’s email 

address for business communications. If Mr. Tobias receives a business-related email 

message in another email account outside the Firm, he will promptly deliver that 

message to the Firm’s email account. In addition, Mr. Tobias will inform the Firm of 

all outside email accounts which he maintains and will provide the Firm access to 

those accounts upon request.

10. All complaints pertaining to Mr. Tobias, whether verbal or written, will be 

immediately referred to Mr. Lessick for review, and then to the Compliance 

Department. Mr. Lessick will prepare a memorandum to the file with full details as 

to the review, investigation and resolution of the matter. Documents pertaining to 

these complaints will be kept segregated for ease of review during any FINRA 

examination.

11. Mr. Lessick must certify quarterly to the Chief Executive Officer for the Firm that 

Mr. Lessick and Mr. Tobias are in compliance with all of the conditions of the 

Supervision Plan. These certifications will be kept segregated for ease of review 

during any FINRA examination.

12. The Firm must obtain prior approval from FINRA Member Supervision if it wishes to 

change Mr. Tobias’s primary or alternate supervisors or if the Firm wishes to change 

any provision of this Supervision Plan. The Firm will submit any proposed changes 

or other requested information under this Supervision Plan to FINRA’s SD Group at 

SDMailbox@FINRA.org.

42

42 See id. at 7-8.
8

III. Relief Sought

Pursuant to Exchange Act Rule 19h-1(d), the Commission may grant applications related 

to relief for certain statutory disqualifications. More specifically, pursuant to Rule 19h-1(d), an

SRO may include with its 19h-1 notice an application to the Commission seeking an order 

declaring, as applicable here, that notwithstanding such person’s disqualification, the 

Commission:

1. Will not institute proceedings pursuant to, among other things, Sections 15(b)(6) and 

19(h) of the Exchange Act if such person seeks to obtain association with a broker or 

dealer; and

2. Will not direct the SRO to, among other things, bar the proposed association as 

provided in Section 15A(g)(2) of the Exchange Act.

In the Application, FINRA seeks such an order from the Commission. 

IV. Conclusion

The Commission has reviewed the Application and the record before FINRA in 

connection with FINRA’s approval of Mr. Tobias’s proposed association with the Firm as a nonregistered individual performing part-time accounting work subject to heightened supervisory 

procedures. Based on that review of the representations made by FINRA and HBC in the 

Application and documents referenced or appended thereto,

43 the Commission grants FINRA’s 

application, pursuant to Exchange Act Rule 19h-1(d), seeking a declaration from the 

Commission that it will not: (1) institute proceedings pursuant to Sections 15(b) and 19(h) of the 

Exchange Act on the basis of Mr. Tobias seeking to obtain association with the Firm and (2)

direct FINRA to bar Mr. Tobias’s proposed association pursuant to Section 15A(g)(2) of the 

Exchange Act.

43 See supra note 1 (stating that all representations, terms, and conditions of employment 

contained in FINRA’s Rule 19h-l notice filing (which includes HBC’s MC-400 

Application to FINRA), including anything that is not specifically listed in this order, are 

incorporated herein by reference).
9

Accordingly, IT IS ORDERED that the Application of FINRA on behalf of HBC and 

Tobias be, and hereby is, granted.

For the Commission, by the Division of Trading and Markets, pursuant to delegated 

authority.44

Sherry R. Haywood,

Assistant Secretary.

44 17 CFR 200.30-3(a)(4).