The Financial Industry Regulatory Authority (FINRA) is one of various authorities tasked with promoting transparency and investor safety within the retail investment industry. Specifically, among other roles, FINRA maintains a broker registration system under which all individual brokers and brokerage firms must register before offering their services to individual investors. All registered brokers and brokerage firms are required to comply with FINRA’s rules and regulations (many of which mirror federal securities fraud laws), and failure to comply can result in a broker or brokerage firm being barred from selling securities investments.
While most people would expect their brokers to comply with the rules and regulations that are designed to protect investors, it is not uncommon for individual brokers and brokerage firms to face FINRA discipline. The following are just three recent examples of investment brokers being barred by FINRA due to allegations of improper conduct:
1. Former Wells Fargo Broker Barred for Unauthorized Trading
In August, FINRA barred a former Wells Fargo broker who had also previously worked at Merrill Lynch. According to the Default Decision, the broker was terminated from his employment in 2016 after allegedly engaging in unauthorized trading and asking a client for a loan. The broker failed to respond to FINRA’s requests for information (which itself is a violation of FINRA’s rules and regulations), and this provided the grounds for FINRA’s decision.
2. Stifel Nicolaus & Co. Broker Barred After a 39-Year Career
In September, FINRA barred a broker who had worked in the industry for 39 years, including 10 years with Stifel Nicolaus & Co. which ended in 2017. The broker had eight previous disclosures on his BrokerCheck report, including several related to customer disputes. After refusing to participate in FINRA’s investigation into allegations that he provided unsuitable investment recommendations to multiple clients, the broker consented to the termination of his FINRA registration.
3. Benjamin & Jerold Brokerage Barred after Allegedly Providing Unsuitable Advice
Also in September, a broker previously working at Benjamin & Jerold Brokerage consented to a bar after being terminated from his employment. According to the Letter of Acceptance, Waiver and Consent, the broker lost his job due to allegations that he provided unsuitable investment advice to clients. He had previously been fined for executing unauthorized trades and entering into discretionary transactions without client authorization. Stating that he intended to retire, the broker declined to participate in FINRA’s investigation, and the bar effectively ended his 23-year career.
As an individual investor, it is important to make sure you know your investment advisor, and to take immediate action at the first sign of potential fraudulent conduct. In addition to facing disciplinary action, brokers who engage in fraudulent conduct can also be held financially liable through FINRA arbitration.
Should You File a Claim With FINRA?
If you are concerned about your broker’s actions, we encourage you to contact us about filing a claim with FINRA. Our attorneys have decades of experience representing clients in arbitration; and, if you are a victim of financial fraud, we may be able to help you recover your investment losses. To speak with a lawyer in confidence, please call 212-742-1414, or send us a message online and we will be in touch as soon as possible.