Bad Brokers

According to FINRA, Robert Allen Silvestri was barred from association with any FINRA member in all capacities for refusing to appear for on-the-record testimony requested by FINRA in connection with its investigation into whether he borrowed funds from a customer.

FINRA rules generally prohibit ...

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According to FINRA, Robert Allen Silvestri was barred from association with any FINRA member in all capacities for refusing to appear for on-the-record testimony requested by FINRA in connection with its investigation into whether he borrowed funds from a customer.

FINRA rules generally prohibit registered representatives from borrowing money from customers unless the customer is a financial institution engaged in the business of lending money, the customer is an immediate family member, or the firm has specifically approved the arrangement. These rules exist to protect customers from being pressured or manipulated into lending money to their financial professionals, which creates an inherent conflict of interest.

When a registered person borrows money from a customer outside the permitted exceptions, it raises serious concerns about abuse of the trust relationship and potential exploitation of the customer. FINRA's investigation sought to determine whether Silvestri had improperly borrowed from a customer and whether the borrowing was disclosed to and approved by his firm.

By refusing to testify about whether he borrowed funds from a customer, Silvestri prevented FINRA from gathering facts about the nature and circumstances of any borrowing, whether it violated FINRA rules, and whether the customer was harmed. This refusal to cooperate with an investigation into potential borrowing from customers is a serious violation warranting a permanent bar.

Investors should be very cautious if a financial professional asks to borrow money from them. In most cases, such requests violate industry rules and should be reported to the firm and to FINRA. The borrowing prohibition exists to protect investors from situations where their broker may have undue influence over them or may not be able to provide objective advice while owing them money.

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According to FINRA, Robert Lee Golding was barred from association with any FINRA member in all capacities for refusing to produce information and documents requested by FINRA during an investigation originated from a Form U5 filed by his member firm.

The firm filed the Form U5 disclosing that Go...

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According to FINRA, Robert Lee Golding was barred from association with any FINRA member in all capacities for refusing to produce information and documents requested by FINRA during an investigation originated from a Form U5 filed by his member firm.

The firm filed the Form U5 disclosing that Golding voluntarily resigned after allegations that he electronically submitted non-genuine client signatures on annuity applications, misdated a company form, and communicated via text outside the company's monitoring platform. These allegations raise multiple serious concerns about Golding's conduct.

Submitting non-genuine client signatures on annuity applications constitutes forgery and could result in customers being bound to contracts they never actually authorized. This is a form of fraud that undermines the integrity of customer transactions and could lead to customers owning products they didn't want or understand. Misdating company forms can be used to backdate transactions or conceal timing issues, which is another form of falsification. Communicating outside the firm's monitoring platform violates supervision requirements designed to protect customers by allowing the firm to review all communications for potential misconduct.

By refusing to provide information and documents about these allegations, Golding prevented FINRA from fully investigating serious accusations of forgery, falsification, and supervision evasion. The permanent bar imposed reflects that these allegations were serious and that refusing to cooperate with the investigation was itself a severe violation.

Investors should understand that registered representatives who forge signatures, falsify documents, or evade supervision are engaging in serious misconduct that can lead to significant harm. This case demonstrates why cooperation with regulatory investigations is so important - when people refuse to answer questions about such serious allegations, it raises the inference that they have something to hide.

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According to FINRA, Kerry Lee Broderick was barred from association with any FINRA member in all capacities for refusing to appear for on-the-record testimony requested by FINRA in connection with its investigation into whether she circumvented her member firm's policies or procedures by helping ano...

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According to FINRA, Kerry Lee Broderick was barred from association with any FINRA member in all capacities for refusing to appear for on-the-record testimony requested by FINRA in connection with its investigation into whether she circumvented her member firm's policies or procedures by helping another firm registered representative place short-term, speculative trades in his personal account.

Registered representatives are subject to restrictions on trading in their own accounts, particularly for short-term speculative trading that could create conflicts of interest or involve misuse of customer information. Firms typically have policies requiring pre-approval of personal trades and prohibiting certain types of speculative activity. When one registered representative helps another circumvent these policies, it undermines the firm's ability to supervise and creates risks of misconduct.

FINRA's investigation sought to determine whether Broderick had helped a colleague evade the firm's trading restrictions by placing trades on his behalf or otherwise facilitating trades that should not have been permitted. Such conduct could indicate efforts to hide improper trading activity or conflicts of interest.

By refusing to testify about these allegations, Broderick prevented FINRA from gathering facts about what trading assistance she may have provided, whether it violated firm policies, and whether it created any harm to customers or the firm. This refusal to cooperate is a serious violation that warranted a permanent bar from the industry.

For investors, this case illustrates that securities professionals are subject to rules governing their own trading activity, and for good reason. When brokers engage in prohibited speculative trading or help colleagues evade trading restrictions, it can indicate a culture of rule-breaking that may extend to how they handle customer accounts. The refusal to answer questions about such conduct is itself a major red flag.

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According to FINRA, Forrest Addington Wester was barred from association with any FINRA member in all capacities for refusing to produce information and documents requested by FINRA in connection with its investigation into him over concerns about potential misappropriation of client funds.

Misap...

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According to FINRA, Forrest Addington Wester was barred from association with any FINRA member in all capacities for refusing to produce information and documents requested by FINRA in connection with its investigation into him over concerns about potential misappropriation of client funds.

Misappropriation of client funds is theft - it involves taking customer money without authorization for the broker's own use or benefit. This is one of the most serious forms of misconduct in the securities industry and causes direct financial harm to investors who are victimized. When FINRA investigates potential misappropriation, it is examining whether a registered person stole from customers.

Wester's refusal to provide information and documents about potential misappropriation of client funds is extremely concerning because it prevented FINRA from determining whether customers were victims of theft, from gathering evidence for potential criminal prosecution, and from taking action to help victims recover losses.

By refusing to cooperate with this investigation, Wester not only violated his regulatory obligation to respond to FINRA inquiries but also obstructed efforts to protect investors and hold him accountable if wrongdoing occurred. The permanent bar imposed reflects the seriousness of both the underlying allegations and the refusal to cooperate.

Investors should carefully monitor their account statements and immediately report any unauthorized withdrawals or unexplained missing funds to their firm, to FINRA, and to law enforcement. Misappropriation often starts small and escalates over time, so early detection is critical. Investors can also check FINRA BrokerCheck before working with a financial professional to review their disciplinary history - a bar for refusing to provide information about potential misappropriation is a serious red flag indicating possible theft.

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According to FINRA, Ryan Adrian Morfin was fined $10,000 and suspended for five months for engaging in investment banking without registering with FINRA as an Investment Banking Representative and for acting in a principal capacity without registering as a General Securities Principal.

Morfin par...

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According to FINRA, Ryan Adrian Morfin was fined $10,000 and suspended for five months for engaging in investment banking without registering with FINRA as an Investment Banking Representative and for acting in a principal capacity without registering as a General Securities Principal.

Morfin participated in multiple offerings for which his member firm was engaged as a financial advisor for raising capital through equity and/or debt. His activities included providing advice on how offerings should be structured, facilitating due diligence, assisting with preparing offering materials, directing an employee to send investment banking engagement letters, attending meetings and calls regarding offerings, signing non-disclosure agreements, and marketing offerings to investment firms - all without the required investment banking registration.

Morfin also acted in a principal capacity by being involved in hiring and attempted firing of several firm employees including executives, setting individual employment terms such as compensation, directing the CFO to make large wire transfers, dictating when the CFO should pay firm bills, and expensing hundreds of thousands of dollars of business expenses to the firm at his own discretion - all despite not being registered with the firm in any capacity or having passed the requisite principal exam.

Registration requirements exist to ensure that persons engaged in securities activities have demonstrated minimum competency by passing appropriate examinations. When individuals perform functions requiring registration without obtaining it, they may lack necessary knowledge and create risks for customers and the firm.

For investors, this case demonstrates the importance of working with properly registered and qualified professionals. Investment banking activities and principal-level management involve complex regulatory requirements, and individuals performing these functions should have demonstrated competency through proper registration and examinations. Investors can verify a person's registration status through FINRA BrokerCheck.

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According to FINRA, William Savary was fined $5,000 and suspended for one year for participating in private securities transactions by executing securities purchases totaling $1,746,309 in another person's brokerage account held away from his member firms, over which he had discretionary authority, ...

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According to FINRA, William Savary was fined $5,000 and suspended for one year for participating in private securities transactions by executing securities purchases totaling $1,746,309 in another person's brokerage account held away from his member firms, over which he had discretionary authority, without disclosing the transactions to his firms.

Savary entered into a written trading authorization agreement granting him full investment authority over the person's self-directed brokerage account. He accessed the account online using the person's username and password and executed securities transactions. Savary received $234,532 in compensation from the account owner for his management of the account, but never disclosed any of these securities transactions to his firms.

FINRA rules require registered representatives to provide prior written notice to their member firm before participating in any private securities transaction (selling away). This rule exists so firms can supervise the activity, ensure it is appropriate, and protect customers from unsuitable or fraudulent investments conducted outside the firm's oversight.

When registered representatives manage customer accounts or execute trades away from their firm without disclosure, the firm has no ability to supervise the activity, review the suitability of investments, or protect the customer if problems arise. The fact that Savary received substantial compensation for this undisclosed activity makes it even more problematic, as it created a financial incentive that his firm knew nothing about.

Investors should be cautious if a financial professional suggests conducting investment activity through accounts away from their registered firm. Such arrangements prevent the firm from supervising the activity and may indicate the representative is trying to avoid oversight. Investors should ask whether any proposed investment or account is supervised by the broker's firm and should report any requests to conduct business away from the firm.

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According to FINRA, James Samuel Hanson was fined $5,000 and suspended for eight months for willfully failing to amend his Form U4 to disclose that he had been charged with sixteen felonies.

Hanson was arrested, indicted by a grand jury on sixteen felony charges, and arraigned - all while he was ...

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According to FINRA, James Samuel Hanson was fined $5,000 and suspended for eight months for willfully failing to amend his Form U4 to disclose that he had been charged with sixteen felonies.

Hanson was arrested, indicted by a grand jury on sixteen felony charges, and arraigned - all while he was associated with his member firm. Although Hanson was aware that he had been charged with these felonies, he never amended his Form U4 to disclose the felony charges and never disclosed them to his firm. The firm later discovered the felony charges independently and discharged Hanson.

Form U4 is the Uniform Application for Securities Industry Registration that contains information about a person's background, including criminal charges and convictions. Investors and firms rely on Form U4 information to make informed decisions about who they work with and who they employ. The requirement to promptly disclose criminal charges exists so that firms can evaluate whether the person should continue in their position and so that investors have access to material information about their financial professional's background.

Hanson's willful failure to disclose sixteen felony charges for an extended period deprived his firm of information needed to make employment decisions and deprived investors of information they were entitled to know about. The fact that these were felony charges - serious criminal allegations - makes the failure to disclose particularly egregious.

Investors should regularly check their financial professional's background through FINRA BrokerCheck, which contains information from Form U4 filings including criminal charges and disciplinary history. When a broker fails to disclose criminal charges, it raises serious questions about their honesty and integrity. This case demonstrates why accurate and timely disclosure is so important for investor protection.

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According to FINRA, Brian Keith Shey was fined $5,000 and suspended for four months for willfully failing to amend his Form U4 to disclose four felony charges.

The State of Florida charged Shey with two felony counts of submitting a false insurance application and two felony counts of submitting ...

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According to FINRA, Brian Keith Shey was fined $5,000 and suspended for four months for willfully failing to amend his Form U4 to disclose four felony charges.

The State of Florida charged Shey with two felony counts of submitting a false insurance application and two felony counts of submitting a fraudulent insurance claim. Shey was aware of the felony charges but failed to amend his Form U4 within 30 days or at any point during his association with his member firm. The charges were later dismissed.

Form U4 disclosure requirements exist to ensure transparency about the backgrounds of registered persons. Even if criminal charges are later dismissed, they must be disclosed when they occur because they represent material information that firms and investors are entitled to know. The requirement to disclose within 30 days ensures that this information becomes available promptly rather than being hidden for months or years.

The fact that Shey was charged with insurance fraud - submitting false applications and fraudulent claims - is particularly concerning for someone in the financial services industry, as it suggests dishonesty and willingness to commit fraud for financial gain. While the charges were ultimately dismissed, Shey's failure to disclose them violated his obligation to be transparent about his background.

Investors should understand that registered persons must disclose criminal charges even if they are later acquitted or dismissed. This requirement exists because the charges themselves are material information. Investors can check FINRA BrokerCheck to review a financial professional's criminal and disciplinary history, including charges that were later dismissed. A pattern of failing to disclose required information is itself a red flag about a person's trustworthiness.

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According to FINRA, John Benjamin Nelson was suspended for one month for forging the electronic signature of his business partner on account update forms without permission, causing his member firm to maintain inaccurate books and records.

When Nelson's business partner unexpectedly stopped comin...

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According to FINRA, John Benjamin Nelson was suspended for one month for forging the electronic signature of his business partner on account update forms without permission, causing his member firm to maintain inaccurate books and records.

When Nelson's business partner unexpectedly stopped coming to work, Nelson electronically signed his partner's name without permission on account update forms that had the effect of making Nelson the sole representative for customer accounts that had previously been jointly represented. While the customers all approved of the change and Nelson's partner (as his supervisor) subsequently approved the underlying transactions and split commissions with Nelson, the forgery itself violated FINRA rules.

Forging signatures on firm documents, even with good intentions or when customers approve of the underlying changes, is prohibited because it undermines the integrity of firm records and creates documentation that falsely represents who actually signed the forms. Firms rely on the authenticity of signatures to verify that proper authorizations were obtained and that records accurately reflect what occurred.

By forging his partner's signature, Nelson caused the firm to maintain inaccurate books and records showing that his partner had authorized changes that he actually had not authorized at the time. While the circumstances here are less egregious than some forgery cases - customers approved the changes and the partner later approved the transactions - the conduct still violated important recordkeeping requirements.

Investors should understand that accurate records and authentic signatures are fundamental to the integrity of the securities industry. When representatives forge signatures, even in situations they believe are harmless, it creates risks of errors, disputes, and potential abuse. Firms and investors must be able to trust that documents bearing someone's signature were actually authorized by that person.

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According to FINRA, Fedelyne Cemoin was suspended for four months for willfully failing to amend her Form U4 to disclose that she had been charged with a felony.

Cemoin was charged with felony public assistance fraud. She knew that she had been charged with a felony but did not amend her Form U4 ...

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According to FINRA, Fedelyne Cemoin was suspended for four months for willfully failing to amend her Form U4 to disclose that she had been charged with a felony.

Cemoin was charged with felony public assistance fraud. She knew that she had been charged with a felony but did not amend her Form U4 to disclose the felony charge within 30 days of learning of it. In fact, Cemoin did not amend her Form U4 to disclose the felony charge at any point prior to resigning from her member firm over four years later. Additionally, Cemoin submitted compliance questionnaires to her firm that falsely stated she had not been charged with any felony.

This case involves not just a failure to disclose but active misrepresentation. By submitting compliance questionnaires falsely stating she had not been charged with any felony when she knew she had been charged, Cemoin went beyond passive non-disclosure to affirmatively lying to her firm. This demonstrates a deliberate effort to conceal material information rather than an inadvertent oversight.

The charge of public assistance fraud involves obtaining government benefits through false statements or other fraud. For someone in the financial services industry, such a charge raises serious concerns about honesty and integrity. The fact that Cemoin then concealed this charge for over four years while repeatedly certifying that she had no felony charges compounds the dishonesty.

Investors rely on Form U4 disclosures to learn about their financial professional's background, including criminal charges. When registered persons not only fail to disclose charges but affirmatively lie about them on compliance questionnaires, they demonstrate a willingness to deceive that should disqualify them from positions of trust. Investors should check FINRA BrokerCheck regularly and should be concerned if a financial professional has a history of failing to disclose required information.

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