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Regulatory Sanctions

These Brokers Chose to Quit Rather Than ‘Face the Music’

October 25, 2018

[Photo: Face the Music /]


by Howard Haykin


Every month FINRA reports on a dozen or so brokers who were barred for failing or refusing to cooperate with a FINRA investigation into alleged violative activities. Some would have been barred, anyway – like those who excessively churned elderly customers’ accounts or who willfully failed to disclose (on their Forms U4) civil or felony charges and/or personal financial difficulties (liens and bankruptcies). The rest, however, likely faced ‘moderate’ fines (ranging from $10K to $25K) and suspensions (2 to 6 months).
In any case, each decided to walk away from the industry. Here are their stories…


A broker with 24 years’ experience (with Series 24 and 27 licenses) … it’s alleged he potentially participated in a private securities transaction.  (AWC #2018058695501)


A broker with 29 years’ experience (with Series 24 license) … it’s alleged he recommended a $300,000 investment away from his member firm to a former firm customer. After initially cooperating, he refused further cooperation.  (AWC #2018058302101)


A broker with 5 years’ experience … it’s alleged he willfully failed to disclose a civil judgment (which FINRA deemed material) on his Form U4.  (AWC #2016050447102)


A broker with 41 years’ experience (with Series 4 and 24 licenses) … it’s alleged he excessively traded, churned and recommended penny stocks in an elderly customer’s trust account.  [Financialish Note: Perhaps it was time to retire, especially if commissions had tailed off.]  (AWC #2017054755202)


A broker with 11 years’ experience … it’s alleged he sold promissory notes to customers.  (AWC #2018058564201)


A broker with 23 years’ experience (with Series 4 and 24 licenses) … it’s alleged that trading in his account and the account of a customer may have violated federal securities laws or regulations or FINRA rules. (AWC #2017053556901)


A broker with 29 years’ experience … it’s alleged that he participated in the recommendation and sale of unsuitable investment products to customers.  (AWC #2018057843501)


A broker with 17 years’ experience (with Series 24 license) … it’s alleged he engaged in an unsuitable pattern of trading in at least 3 customer accounts.  (AWC #2017056067501)


A broker with 15 years’ experience (with 9 firms) …

it’s alleged he received a loan from a customer of a non FINRA-regulated bank that was partnered with his member firm; he also failed to timely disclose certain civil judgments and a tax lien.  (AWC #2016049315202)


A broker with 35 years’ experience … it’s alleged he willfully failed to amend his Form U4 to disclose an indictment, and subsequent conviction, on 3 felony charges; he also remained associated with a member firm after his conviction, and while subject to statutory disqualification.  (AWC #2016050312401)


A broker with 14 years’ experience with 1 firm … it’s alleged she failed to disclose on her Form U4 multiple tax liens totaling over $350,000.  (AWC #2016050951801)


A broker with 6 years’ experience with 1 firm … she was under internal review for: (i) alleged fraud, (ii) wrongful taking of property, or violating investment-related statutes, regulations, rules or industry standards of conduct, and (iii) participation in clients’ outside business activities.  (AWC #2016049202101)



These cases were reported in FINRA Disciplinary Actions for September 2018.

For details on any case, go to ...  FINRA Disciplinary Actions Online, and refer to the Respective Case Number.