Bad Brokers

According to FINRA, Trevor Michael Saliba was barred from the securities industry after the Securities and Exchange Commission sustained FINRA's findings that he provided false documents to regulators and failed to produce business computers.

The SEC's remand decision sustained both the findings ...

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According to FINRA, Trevor Michael Saliba was barred from the securities industry after the Securities and Exchange Commission sustained FINRA's findings that he provided false documents to regulators and failed to produce business computers.

The SEC's remand decision sustained both the findings and sanctions imposed by FINRA's National Adjudicatory Council. Saliba provided false documents to FINRA in an effort to convince the regulator to reverse the denial of a continuing membership application filed by a member firm he owned. When FINRA subsequently requested documents, Saliba produced the same false documents again in response.

The SEC agreed with FINRA's determination that Saliba's misconduct demonstrated dishonesty and a lack of integrity, making a bar the appropriate sanction. In the securities industry, truthfulness with regulators is fundamental. When individuals provide false documents to FINRA, it undermines the entire regulatory system and demonstrates unfitness for continued association with firms that serve investors.

The SEC also sustained a separate bar imposed on Saliba for failing to produce all his business computers and testifying falsely during on-the-record testimony about his use of computers for business purposes. The SEC agreed this misconduct demonstrated an inability to comply with regulatory rules and raised serious investor protection concerns.

Regulatory investigations depend on honest cooperation from industry participants. When FINRA requests documents or testimony, it is exercising its authority to protect investors and maintain market integrity. Individuals who provide false documents or testimony, or who fail to produce required materials, impede investigations that may be examining potential harm to investors.

For investors, this case illustrates the importance of regulatory oversight and the consequences for those who attempt to thwart it. The securities industry operates on trust, and that trust extends to honest dealings with regulators. When individuals demonstrate they cannot be trusted to provide truthful information to FINRA or the SEC, they have no place in an industry that manages other people's money.

The permanent bar reflects the seriousness with which regulators view obstruction and dishonesty. Unlike some violations that may result from misunderstanding complex rules, providing false documents represents a deliberate choice to deceive regulators. The SEC's decision to sustain the bar sends a clear message that such conduct will result in removal from the industry.

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According to FINRA, Rosaline Alam was barred from the securities industry for refusing to provide documents and information requested by FINRA in connection with its investigation into allegations that she misappropriated funds from an elderly client.

Alam's member firm filed a Form U5 amendment ...

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According to FINRA, Rosaline Alam was barred from the securities industry for refusing to provide documents and information requested by FINRA in connection with its investigation into allegations that she misappropriated funds from an elderly client.

Alam's member firm filed a Form U5 amendment disclosing that it had received allegations that Alam misappropriated funds from an elderly client and, in violation of company policy, had been named a beneficiary in the client's will. These are serious allegations involving potential elder financial exploitation—one of FINRA's top enforcement priorities.

When FINRA opened an investigation into these circumstances, it requested documents and information from Alam. She refused to provide the requested materials. This refusal to cooperate is itself a violation of FINRA rules, and one that typically results in a bar from the industry.

FINRA rules require associated persons to cooperate with investigations. This obligation exists because FINRA cannot effectively protect investors if industry participants can simply refuse to provide information about their conduct. When someone refuses to cooperate with an investigation, it prevents FINRA from determining what actually happened and whether investors were harmed.

The refusal to cooperate is particularly troubling given the nature of the underlying allegations. Elder financial exploitation is a serious problem in the securities industry, and firms have specific policies prohibiting registered representatives from being named as beneficiaries in customer wills precisely because of the risk of undue influence and exploitation. When allegations of such misconduct arise, FINRA must be able to investigate fully to protect vulnerable investors.

For investors, especially seniors, this case reinforces important protections. Brokerage firms typically prohibit their employees from being named as beneficiaries in customer wills or estate documents unless the customer is a family member. This policy protects customers from being influenced to change their estate plans to benefit their financial advisor. If a broker suggests being named in your will or trust, this is a major red flag that should be reported to the firm's compliance department and to FINRA.

The bar from the industry reflects the seriousness of refusing to cooperate with regulatory investigations. When individuals obstruct investigations into potential elder abuse, they demonstrate unfitness to work in an industry built on trust and dedicated to protecting investors.

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According to FINRA, Collins Bhola was barred from the securities industry for refusing to provide on-the-record testimony requested by FINRA in connection with its investigation into facts described in a Rule 4530 filing made by a member firm.

FINRA Rule 4530 requires firms to report certain even...

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According to FINRA, Collins Bhola was barred from the securities industry for refusing to provide on-the-record testimony requested by FINRA in connection with its investigation into facts described in a Rule 4530 filing made by a member firm.

FINRA Rule 4530 requires firms to report certain events to FINRA, including customer complaints, internal investigations, and potential violations of securities laws or regulations. When a firm makes such a filing, FINRA often conducts an investigation to determine what occurred and whether any rules were violated. These investigations frequently require on-the-record testimony from individuals involved.

Bhola refused to appear for on-the-record testimony that FINRA requested as part of its investigation. This refusal violated FINRA Rule 8210, which requires persons associated with member firms to provide information and testimony in connection with FINRA investigations. The rule is fundamental to FINRA's ability to regulate the industry and protect investors.

When individuals refuse to provide testimony, they prevent FINRA from gathering facts necessary to determine whether misconduct occurred and whether investors were harmed. The refusal to testify is viewed as such a serious violation that it almost always results in a bar from the industry, regardless of what the underlying investigation concerned.

FINRA cannot compel testimony the way courts can, but it can—and does—bar individuals who refuse to cooperate. This enforcement approach is essential to maintain regulatory effectiveness. If individuals could simply refuse to testify without consequences, FINRA investigations would be impossible to conduct, and investor protection would be severely compromised.

For investors, cases like this one demonstrate FINRA's commitment to investigating potential misconduct. When you file a complaint or when a firm reports an incident to FINRA, the regulator takes these matters seriously and conducts investigations to determine what happened. The system depends on industry participants cooperating with those investigations.

The bar from the industry is a permanent sanction absent extraordinary circumstances. Bhola's refusal to testify means he can no longer work in the securities industry in any capacity. This severe consequence reflects the fundamental importance of cooperation with regulatory investigations. Investors should be reassured that when individuals obstruct investigations, they are removed from the industry.

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According to FINRA, Ronnie Rindon Dumag was barred from the securities industry for refusing to produce information and documents requested by FINRA in connection with its investigation into his potential conversion of funds from an elderly customer.

Conversion—the unauthorized taking of customer...

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According to FINRA, Ronnie Rindon Dumag was barred from the securities industry for refusing to produce information and documents requested by FINRA in connection with its investigation into his potential conversion of funds from an elderly customer.

Conversion—the unauthorized taking of customer funds—is one of the most serious violations in the securities industry. It represents a complete betrayal of the trust customers place in their financial advisors and is particularly egregious when the victim is an elderly investor who may be more vulnerable to financial exploitation.

When FINRA received information suggesting Dumag may have converted funds from an elderly customer, it opened an investigation and requested documents and information from him. Dumag refused to provide the requested materials. This refusal prevented FINRA from determining whether conversion actually occurred and, if so, the extent of the harm to the customer.

The refusal to cooperate with a regulatory investigation violates FINRA Rule 8210, which requires associated persons to provide documents and information in connection with FINRA investigations. This rule is essential to FINRA's mission to protect investors. Without the ability to compel production of documents and information, FINRA could not effectively investigate potential misconduct.

The combination of the underlying allegations—potential conversion from an elderly customer—and the refusal to cooperate is particularly troubling. If Dumag had not converted customer funds, cooperating with the investigation and providing exculpatory documents would have been in his interest. The refusal to provide information in the face of serious allegations creates an inference that cooperation would have revealed information harmful to his interests.

For elderly investors and their families, this case underscores the importance of monitoring account activity and maintaining oversight of financial accounts. Conversion often involves unauthorized withdrawals or transfers that may appear legitimate if not carefully reviewed. Families should be involved in elderly relatives' financial affairs and watch for unexplained account activity, particularly if a financial advisor has developed a close personal relationship with the customer.

The bar from the industry is permanent and reflects the seriousness of both the underlying allegations and the refusal to cooperate. Dumag can no longer work in the securities industry in any capacity. This sanction protects investors from an individual who was accused of stealing from an elderly customer and who refused to cooperate with the investigation into those allegations.

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According to FINRA, Amber Rose Lewis was barred from the securities industry for fabricating documents falsely representing that she passed the FINRA Securities Industry Essentials (SIE) exam and providing false and misleading information to FINRA.

Lewis took the SIE exam and failed. When her mem...

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According to FINRA, Amber Rose Lewis was barred from the securities industry for fabricating documents falsely representing that she passed the FINRA Securities Industry Essentials (SIE) exam and providing false and misleading information to FINRA.

Lewis took the SIE exam and failed. When her member firm requested a copy of her exam score report, she provided a falsified report she had created, stating that she passed the exam. Based on this fabricated document, the firm filed an initial Form U4 on her behalf, beginning the registration process.

The scheme unraveled when the firm received notice that Lewis had failed the SIE exam. When the firm approached Lewis for an explanation, she escalated her deception. She provided the firm with a series of fabricated emails, including emails she purportedly sent to and received from test administrators, falsely indicating that the failing score belonged to another person and that she had passed the exam. She also provided a fabricated email falsely reflecting that she had notified FINRA of the conflicting score reports.

Lewis then provided false and misleading information directly to FINRA. After FINRA served her with requests seeking information regarding her SIE exam, Lewis falsely stated that she received a passing score and that she had worked with test administrators to resolve her conflicting scores. These false statements to FINRA compounded her misconduct and demonstrated a pattern of dishonesty.

This case involves multiple layers of deception: creating false exam results, fabricating emails from third parties, lying to her firm, and lying to FINRA. Each act of dishonesty was designed to conceal the fact that she had failed a qualification exam required to work in the securities industry.

Qualification exams exist to ensure that individuals working in the securities industry possess minimum knowledge necessary to serve investors competently. The exam requirement protects investors by ensuring that registered representatives understand basic securities concepts, regulations, and ethical obligations. When someone fabricates exam results, they circumvent these important investor protections.

For investors, this case demonstrates FINRA's verification processes and commitment to integrity in the qualification system. Even though Lewis successfully deceived her firm initially, FINRA's systems detected the discrepancy and the deception was uncovered. Investors can take some comfort knowing that elaborate schemes to bypass qualification requirements are likely to be detected.

The bar from the industry is appropriate given the sophisticated nature of the fraud and the multiple false statements to both the firm and FINRA. Lewis demonstrated that she lacks the honesty and integrity necessary to work in an industry built on trust. The securities industry cannot function if participants cannot be trusted to be truthful about basic qualifications.

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According to FINRA, Devin Lamarr Wicker was barred from the securities industry and ordered to pay $50,000 in restitution to a customer after the Securities and Exchange Commission sustained findings that he converted customer funds intended for a law firm retainer.

A customer hired Wicker's memb...

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According to FINRA, Devin Lamarr Wicker was barred from the securities industry and ordered to pay $50,000 in restitution to a customer after the Securities and Exchange Commission sustained findings that he converted customer funds intended for a law firm retainer.

A customer hired Wicker's member firm to serve as underwriter for its anticipated public offering and transferred $50,000 to the firm for the sole purpose of paying a retainer to a law firm. Instead of using the funds for their intended purpose, Wicker used them for other purposes. He never paid the law firm and never returned the funds to the customer, despite receiving at least seven written requests from both the customer and the law firm.

After the customer wired the $50,000 to the firm's bank account, essentially all of the account's funds were used to pay the firm's other expenses. Wicker controlled the firm's bank account into which the retainer was wired, and he authorized withdrawals and payments from the account for other purposes, including substantial payments to himself. To date, Wicker has not repaid the customer or sent the money to the law firm.

Conversion is one of the most serious violations in the securities industry. It represents theft—taking customer money for unauthorized purposes. In this case, the customer specifically designated the funds for a particular purpose (paying a law firm retainer), and Wicker instead used the money to pay firm expenses and compensate himself.

The SEC sustained both the findings and sanctions imposed by FINRA's National Adjudicatory Council, rejecting Wicker's arguments that the entire proceeding should have been dismissed. The SEC's decision demonstrates that conversion cases receive serious scrutiny at all levels of review, and individuals cannot escape consequences by appealing to higher authorities.

Wicker appealed the SEC's decision to the US Court of Appeals for the District of Columbia Circuit, where the bar remains in effect pending review. The fact that Wicker has pursued every available appeal while still not repaying the customer demonstrates a continued unwillingness to take responsibility for the conversion.

For investors, this case illustrates the importance of monitoring how firms handle customer funds, particularly funds designated for specific purposes. When you provide money to a brokerage firm or related entity for a particular purpose—whether a retainer, an escrow deposit, or any other designated use—you have a right to expect the funds will be used only for that purpose. Funds should be held in appropriate segregated accounts, not commingled with firm operating accounts where they can be used for other purposes.

The bar and restitution order reflect the serious consequences for conversion. Even though Wicker has appealed, he remains barred from the industry and owes the full $50,000 plus interest to the customer he stole from.

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According to FINRA, Austin Richard Dutton Jr. was barred from the securities industry and ordered to pay $65,509 in disgorgement plus interest after a hearing officer found he recommended unsuitable illiquid alternative investments to retired and near-retirement customers, falsified firm records, an...

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According to FINRA, Austin Richard Dutton Jr. was barred from the securities industry and ordered to pay $65,509 in disgorgement plus interest after a hearing officer found he recommended unsuitable illiquid alternative investments to retired and near-retirement customers, falsified firm records, and failed to respond to FINRA requests.

Dutton recommended that customers—most of whom were retired or approaching retirement—purchase $1.2 million in illiquid alternative investments without having a reasonable basis to believe such investments were suitable. These recommendations generated $72,789 in commissions for Dutton and his firm. The recommendations were unsuitable based on the customers' investment profiles, including their net worth, investable assets, annual income, investment objectives, and risk tolerance.

Alternative investments such as non-traded REITs, business development companies, and private placements can be appropriate for some investors, but they carry significant risks including illiquidity, complexity, and high fees. For retired investors who may need access to their funds for living expenses or emergencies, illiquid investments that cannot be easily sold are often unsuitable. Dutton's recommendations prioritized generating commissions over serving his customers' best interests.

Making matters worse, Dutton falsified books and records of his firm to make the unsuitable recommendations appear appropriate. He falsified new account documents, Suitability Forms, Direct Business Profile and Agreements, and Accredited Investor Forms, causing these documents to contain inaccurate information about customers' net worth, risk tolerance, investment objectives, and concentration percentages in alternative investments. This document falsification was designed to make unsuitable investments appear compliant with firm policies.

Dutton also failed to respond or timely respond to FINRA requests for information and documents in connection with two separate investigations. In the investigation into his sale of alternative investments, Dutton did not respond until after FINRA initiated an expedited proceeding that would have led to a bar if he failed to comply. In a separate investigation into whether he had failed to disclose participation in a private securities transaction, Dutton indicated he would "consider" responding but ultimately failed to provide requested documents and information, even after FINRA warned that failure to respond could result in a bar.

For investors, this case illustrates several important lessons. First, be skeptical of recommendations for illiquid alternative investments, especially if you are retired or nearing retirement and may need access to your funds. Second, understand that high commissions create conflicts of interest—advisors may be financially motivated to recommend products that are not in your best interest. Third, if investment recommendations seem inconsistent with your stated investment objectives and risk tolerance, question whether the advisor is accurately representing your profile.

The bar and disgorgement order reflect the seriousness of recommending unsuitable investments, falsifying records to conceal unsuitability, and failing to cooperate with regulatory investigations. The requirement to disgorge commissions ensures Dutton does not profit from his misconduct.

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According to FINRA, Bryan Noonan was barred from the securities industry for refusing to produce information and documents requested by FINRA in connection with its investigation into whether he engaged in undisclosed outside business activities and private securities transactions.

Outside busine...

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According to FINRA, Bryan Noonan was barred from the securities industry for refusing to produce information and documents requested by FINRA in connection with its investigation into whether he engaged in undisclosed outside business activities and private securities transactions.

Outside business activities (OBAs) and private securities transactions, often called "selling away," are common sources of investor harm in the securities industry. When registered representatives engage in business activities or securities transactions away from their member firm without disclosure and approval, the firm cannot supervise those activities to protect investors. This creates significant risks, as many investment fraud schemes involve representatives who solicit customers to invest in opportunities outside the firm's oversight.

FINRA's investigation sought to determine whether Noonan engaged in such undisclosed activities. When FINRA requested documents and information about his activities, Noonan refused to provide them. This refusal violated FINRA Rule 8210, which requires associated persons to cooperate with FINRA investigations.

The refusal to cooperate is particularly concerning given the nature of the underlying investigation. If Noonan had not engaged in undisclosed OBAs or private securities transactions, providing information to clear his name would have been straightforward. The refusal to provide information when accused of activities that often harm investors raises serious concerns about what the documents and information might have revealed.

FINRA cannot function effectively if individuals can simply refuse to provide information about their activities. The regulatory system depends on the ability to investigate potential misconduct and gather facts. When someone refuses to cooperate, FINRA must impose severe sanctions—typically a bar from the industry—to maintain the integrity of the regulatory process.

For investors, this case highlights the risks of investing in opportunities presented by your financial advisor outside of their brokerage firm. If your advisor suggests an investment opportunity that is not offered through their firm, ask whether the firm is aware of and has approved the transaction. Be especially cautious about investments in private companies, real estate ventures, or other opportunities that seem separate from your regular brokerage account.

The bar from the industry is permanent and prevents Noonan from working in any capacity with a FINRA member firm. This sanction protects investors from an individual who refused to provide information about potential undisclosed activities that could have harmed customers. When industry participants obstruct investigations into activities that commonly result in investor losses, removal from the industry is the appropriate response.

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According to FINRA, Thomas Reyes was barred from the securities industry for refusing to appear for on-the-record testimony requested by FINRA in connection with an investigation into circumstances giving rise to Form U5 amendments filed by his member firm.

Reyes's firm filed two Form U5 amendmen...

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According to FINRA, Thomas Reyes was barred from the securities industry for refusing to appear for on-the-record testimony requested by FINRA in connection with an investigation into circumstances giving rise to Form U5 amendments filed by his member firm.

Reyes's firm filed two Form U5 amendments that triggered FINRA's investigation. The first amendment disclosed an internal review concerning potential undisclosed outside business activities by Reyes. The second amendment disclosed that the internal review concluded Reyes sold annuities that were not on the firm's approved product list away from the firm—a practice known as "selling away."

Selling away is a serious violation that often results in investor harm. When registered representatives sell securities or insurance products away from their firm without disclosure and approval, the firm cannot supervise those sales to ensure they are suitable, properly disclosed, and in customers' best interests. Selling unapproved products creates particular risks because the firm has not conducted due diligence on those products or determined they are appropriate for the firm's customers.

Annuities can be complex products with significant fees, surrender charges, and suitability considerations. When annuities are sold away from a firm without proper supervision, investors may be placed in unsuitable products, charged excessive fees, or subjected to inappropriate sales practices without the protections firm supervision provides.

FINRA sought Reyes's on-the-record testimony to investigate what occurred and whether investors were harmed. Reyes refused to appear for the requested testimony. This refusal violated FINRA Rule 8210 and prevented FINRA from gathering facts necessary to determine the extent of the selling away conduct and any customer harm.

The refusal to testify is viewed as an extremely serious violation because it obstructs FINRA's ability to protect investors. When FINRA cannot interview individuals involved in potential misconduct, investigations are compromised and investor protection suffers. The sanction for refusing to testify is almost always a bar from the industry, regardless of what the underlying investigation concerned.

For investors, this case illustrates the risks of purchasing securities or insurance products from your financial advisor when those products are not offered through the advisor's firm. Before investing, verify that the product is approved by the firm and that the transaction will be properly supervised and documented. Ask for written confirmation that the firm is aware of and has approved the transaction.

If you purchased an annuity or other investment from your advisor and later learned it was not approved by or properly disclosed to their firm, you may have been a victim of selling away. Such transactions often involve higher-than-necessary fees or unsuitable products because they lack proper firm oversight.

The bar from the industry is permanent and prevents Reyes from working in any capacity with a FINRA member firm. This sanction reflects both the seriousness of selling away conduct and the additional misconduct of refusing to cooperate with FINRA's investigation.

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According to FINRA, Rod Charles Dayton was fined $5,000 and suspended from the securities industry for one month after he certified to the State of New York that he had personally completed 18 hours of continuing education required to renew his state insurance license when another person had actuall...

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According to FINRA, Rod Charles Dayton was fined $5,000 and suspended from the securities industry for one month after he certified to the State of New York that he had personally completed 18 hours of continuing education required to renew his state insurance license when another person had actually completed the education on his behalf.

Continuing education requirements exist to ensure that licensed professionals maintain current knowledge of industry developments, regulations, and best practices. These requirements protect consumers by ensuring that insurance and securities professionals stay informed about changes in products, laws, and ethical standards. When someone falsely certifies completion of continuing education, they undermine these consumer protections.

By having another person complete his continuing education, Dayton not only failed to gain the knowledge the education was intended to provide, but also made a false certification to state regulators. This false statement is itself a serious violation, as it demonstrates a willingness to deceive regulators to maintain licensure.

The one-month suspension from July 1 through July 31, 2024, along with the $5,000 fine, reflects that while this violation is serious, it is less egregious than some other forms of misconduct. The sanction is designed to punish the violation, deter similar conduct by others, and emphasize the importance of personally completing required continuing education.

For investors, this case raises questions about whether Dayton possessed current knowledge necessary to properly advise clients on insurance products. Continuing education covers important topics such as regulatory changes, new product features, and evolving suitability standards. When professionals skip this education, they may lack awareness of important developments that affect their ability to serve clients competently.

This case was one of several similar cases in this monthly report involving individuals who falsely certified completion of New York insurance continuing education. The pattern suggests a systemic problem that New York and FINRA have identified and are now addressing through enforcement. Investors in New York and elsewhere should expect their insurance and securities professionals to personally complete required education rather than taking shortcuts that compromise their competence.

The relatively brief suspension allows Dayton to return to the industry after serving the sanction, but the violation will remain part of his permanent regulatory record and will be visible to investors who check his background on FINRA BrokerCheck.

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