Subscribe to our mailing list

* indicates required







We seek to provide information, insights and direction that may enable the Financial Community to effectively and efficiently operate in a regulatory risk-free environment by curating content from all over the web.


Stay Informed with the latest fanancialish news.




Regulatory Sanctions

Would You Buy Stocks from a Broker Who Owns No Investments?

September 12, 2017

by Howard Haykin


The headline for this post might sound crude, if not cruel. However, wouldn’t you be somewhat concerned as a brokerage customer to be getting investment advice from a broker who is not invested in the securities markets – i.e., has no “skin in the game?”


A broker, associated with Allstate Financial Services from 2007 until 2016, agreed to a $5K fine and a 3-month suspension to settle FINRA charges that he submitted 2 falsified brokerage account statements pursuant to obtaining a personal bank loan.



FINRA FINDINGS.    In June 2016, the broker and his wife sought a $225,000 loan from a bank to refinance and remodel their home. As part of the loan application, the broker was asked to provide the bank with account statements for any securities accounts owned by himself and his wife. That request was problematic, in that the account balances of their respective securities accounts with Allstate were $0.13 and $144.90.


Rather than use his family’s account statements with their miniscule balances, the broker used the firm's internal system to print 2 account statements belonging to his clients that had account balances of $28,043 and $58,502. The broker then cut and pasted his and his wife’s names onto those account statements, and submitted these altered, falsified account statements to the bank.


FINANCIALISH TAKE AWAY.    I don’t know whether the couple ever got their bank loan, but I can attest to the fact that the broker completed his 3-month suspension as of 9/4. That said, let's return to the opening question: How should we view a broker who has no investments in the market and likely has little, if any, liquid net worth to his name?


Based on the facts and cricumstances as presented by FINRA, I'd have to respond by saying we’ve got a credibility issue. Sorry for being so frank! And, just as an aside, I would have recommended a 6-month suspension for the broker – for his moral turpitude.


This case was reported in FINRA Disciplinary Actions for August 2017.

For details on this case, go to ...  FINRA Disciplinary Actions Online, and refer to Case #2016052023601.