When Bales worked at Quantum Securities, he must have felt right at home, because the chief financial officer and chief compliance officer of that firm (later known as Regis Securities), Nancy Arnett Vargo, is listed in FINRA records as the president and majority owner of Quantum Capital Corp. Vargo, who worked for Hamilton-Shea in Pompano Beach from April 1995 to December 1996 -- overlapping with Bales -- was never accused of any wrongdoing, and was not named in the Bales arbitration or any other arbitration case.
The rest, as they say, is history. Having failed to leave much of a mark as a stockbroker, except for a serious accusation of unauthorized trading and misrepresentation that he never contested, Bales went on to join the Army after Sept. 11, 2001. The arbitration case dragged on through 2003. It involved trading in the stock of Life Diagnostics Inc. and Stearns & Lehman Inc., unspecified bank stocks, Orange County bonds, and a mortgage-backed security known as a REMIC, or "real estate mortgage investment conduit."
It's not known which of those were pitched to the victim by Bales. What we do know is that by the time the judgment was handed down in 2003, Bales was an Army sergeant and hardly able to fork over a million bucks to anybody.
All of his former employers, meanwhile, have gone to that great boiler room in the sky. In 2002, after multiple disciplinary actions and complaints, Hamilton-Shea was fined $1.38 million and expelled from membership in the NASD. Michael Patterson Inc. was expelled from the securities industry, and its owner, Patterson, was permanently barred, in a 2002 NASD case in which he neither admitted nor denied charges of overcharging muni-bond customers. It was like old home week at the NASD, as Quantum Capital was censured in the same proceeding. The two firms had a secret arrangement in which Michael Patterson Inc. placed all its trades through Quantum, in violation of a slew of rules.
By then, Quantum was defunct. Quantum Securities followed in 2008. Capital Securities of America, after being hammered by multiple NASD and state regulatory fines and censures, was acquired in 2007 by Wunderlich Securities.
But that apparently was not Bales' only flirtation with seeking his fortune in finance.
According to the Army Times,
"Florida records show that Bales was a director at an inactive company called Spartina Investments Inc. in Doral, Fla." Nothing ever came of it. Like a lot of schemes during those years, it just never happened, and would remain forever swathed in obscurity were it not for a horrific day in Afghanistan in 2012.
Gary Weiss' most recent book, AYN RAND NATION: The Hidden Struggle for America's Soul, was published by St. Martin's Press on Feb. 28.
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