Bad Brokers

According to FINRA, Vincent Joseph Cagnina was fined $5,000 and suspended from association with any FINRA member in all capacities for one month.

Cagnina certified to the State of New York that he had personally completed 15 hours of continuing education required to renew his state insurance lice...

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According to FINRA, Vincent Joseph Cagnina was fined $5,000 and suspended from association with any FINRA member in all capacities for one month.

Cagnina certified to the State of New York that he had personally completed 15 hours of continuing education required to renew his state insurance license when another person had completed that continuing education on his behalf. This false certification enabled him to renew his insurance license without actually fulfilling the educational requirements designed to ensure licensed professionals maintain current knowledge.

Continuing education serves a vital function in protecting consumers by ensuring that financial professionals stay informed about regulatory changes, industry developments, and evolving best practices. When individuals circumvent these requirements by having someone else complete the education, they may lack essential knowledge needed to properly advise clients while holding licenses that suggest they possess that knowledge.

Beyond the practical implications, false certification demonstrates a troubling lack of integrity. Financial professionals are entrusted with clients' financial wellbeing and must demonstrate honesty in all aspects of their professional conduct. The willingness to make false certifications to state regulators raises serious questions about an individual's trustworthiness in other areas, including interactions with customers.

For investors, this case serves as a reminder that professional licensing and continuing education requirements exist to protect consumers. When choosing a financial professional, investors should verify that licenses are current and obtained through legitimate means. The case also demonstrates that regulators take continuing education violations seriously and will sanction those who attempt to circumvent these consumer protection requirements.

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According to FINRA, Ashley Marie Curreri was fined $5,000 and suspended from association with any FINRA member in all capacities for one month.

Curreri certified to the State of New York that she had personally completed 15 hours of continuing education required to renew her state insurance licen...

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According to FINRA, Ashley Marie Curreri was fined $5,000 and suspended from association with any FINRA member in all capacities for one month.

Curreri certified to the State of New York that she had personally completed 15 hours of continuing education required to renew her state insurance license when, in fact, another person had completed that continuing education on her behalf. This false certification allowed her to maintain her insurance license without actually completing the required education.

Continuing education requirements are designed to ensure that licensed financial professionals maintain current knowledge of industry regulations, products, risks, and best practices. These requirements protect consumers by helping to ensure that the professionals they rely on for financial advice possess up-to-date knowledge necessary to provide appropriate guidance. When individuals have someone else complete their continuing education, they defeat this purpose and may lack critical knowledge while holding themselves out as properly licensed.

The false certification also raises integrity concerns. Financial professionals occupy positions of trust and must demonstrate honesty in all aspects of their professional activities. Making false certifications to state regulators to obtain or maintain professional licenses demonstrates a willingness to cut corners and deceive authorities, which raises questions about trustworthiness in other areas of professional conduct.

For investors, this case highlights the importance of professional licensing standards and the regulatory framework that ensures financial professionals meet minimum educational requirements. It also demonstrates that FINRA and state regulators take these requirements seriously and will take action against those who attempt to circumvent them through dishonest means.

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According to FINRA, Maureen Joann D'Amico was fined $5,000 and suspended from association with any FINRA member in all capacities for one month.

D'Amico certified to the State of New York that she had personally completed 15 hours of continuing education required to renew her state insurance lice...

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According to FINRA, Maureen Joann D'Amico was fined $5,000 and suspended from association with any FINRA member in all capacities for one month.

D'Amico certified to the State of New York that she had personally completed 15 hours of continuing education required to renew her state insurance license when another person had completed that continuing education on her behalf. This false certification enabled her to renew her insurance license without actually fulfilling the educational requirements.

State-mandated continuing education serves an essential purpose in maintaining professional competence and protecting consumers. These requirements ensure that licensed professionals remain knowledgeable about current regulations, industry practices, product features and risks, and ethical obligations. When individuals circumvent these requirements by having someone else complete the education on their behalf, they undermine the consumer protection purpose of licensing requirements and may lack knowledge essential to properly serving clients.

The false certification also reflects poorly on D'Amico's integrity and trustworthiness. Financial professionals must demonstrate honesty and ethical behavior in all aspects of their professional conduct, including compliance with licensing requirements. The willingness to make false statements to regulatory authorities to obtain or maintain professional credentials raises serious concerns about whether an individual can be trusted to act honestly in interactions with customers and in handling customer assets.

For investors, this case underscores the importance of the regulatory framework governing financial professionals, including licensing and continuing education requirements. These requirements exist to protect consumers by ensuring minimum standards of knowledge and competence. When financial professionals circumvent these requirements through dishonest means, it suggests a lack of integrity that could manifest in other areas of professional conduct.

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According to FINRA, Yuqing Lin was fined $5,000 and suspended from association with any FINRA member in all capacities for one month.

Lin certified to the State of New York that she had personally completed 15 hours of continuing education required to renew her state insurance license when, in fa...

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According to FINRA, Yuqing Lin was fined $5,000 and suspended from association with any FINRA member in all capacities for one month.

Lin certified to the State of New York that she had personally completed 15 hours of continuing education required to renew her state insurance license when, in fact, another person had completed that continuing education on her behalf. This false certification allowed her to renew her insurance license without actually satisfying the educational requirements.

Continuing education requirements are a critical component of professional licensing designed to protect consumers. These requirements ensure that licensed financial professionals maintain current knowledge of regulatory requirements, industry developments, product features and risks, and professional obligations. The purpose is to ensure that consumers receive advice from professionals who possess up-to-date knowledge necessary to provide appropriate guidance. When individuals have someone else complete their continuing education, they circumvent this consumer protection and may lack essential knowledge while holding themselves out as properly licensed.

The false certification also demonstrates a concerning lack of integrity. Financial professionals are entrusted with significant responsibilities related to clients' financial wellbeing. This trust requires honesty and ethical conduct in all professional activities, including compliance with licensing requirements. A willingness to make false certifications to state regulators to maintain professional licenses raises serious questions about an individual's character and trustworthiness in other aspects of professional conduct.

For investors, this case serves as a reminder of the importance of choosing financial professionals who demonstrate integrity and comply with all licensing and educational requirements. It also illustrates FINRA's commitment to enforcing professional standards and taking action against those who attempt to circumvent licensing requirements designed to protect consumers.

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According to FINRA, Ramses David Visher was fined $5,000 and suspended from association with any FINRA member in all capacities for four months.

Visher, serving as Chief Compliance Officer, Chief Financial Officer, and Managing Director of two proposed broker-dealer entities, made negligent misre...

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According to FINRA, Ramses David Visher was fined $5,000 and suspended from association with any FINRA member in all capacities for four months.

Visher, serving as Chief Compliance Officer, Chief Financial Officer, and Managing Director of two proposed broker-dealer entities, made negligent misrepresentations and omitted material information in private placement offerings to a prospective purchaser. He prepared and distributed written materials and emails in which he negligently misrepresented that the entities were approved FINRA members and broker-dealers, when they were not.

After FINRA denied a new membership application for one entity, Visher sent the prospective purchaser materials that continued to refer to that entity as a broker-dealer and outlined projections for income from broker-dealer revenue streams requiring FINRA membership. He then filed an application for a second entity that was largely identical to the denied application, but sent an email stating only that the company name was amended without disclosing that this was a separate legal entity formed after FINRA's denial. These misrepresentations and omissions were material because they gave an incorrect impression of the likelihood that the entity would receive approval to operate as a broker-dealer.

Additionally, Visher negligently misrepresented that he was registered with FINRA in multiple capacities including as a General Securities Principal, Registered Options Principal, and FINOP, when those registrations had expired. Although he was seeking an administrative waiver to avoid retesting, FINRA had not approved his request.

The prospective purchaser ultimately invested $25,000 for a 10 percent ownership interest based on these misrepresentations. Visher later returned the funds with a 30 percent premium. This case demonstrates how even negligent misrepresentations—as opposed to intentional fraud—can mislead investors and violate securities regulations. For investors, it highlights the importance of independently verifying representations about regulatory status and professional qualifications.

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According to FINRA, Lucas R. Mroz was fined $7,500 and suspended from association with any FINRA member in all capacities for 45 days.

Mroz, working as a sales assistant to the registered representative of record for customer accounts, made unauthorized transactions by processing fund transfers f...

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According to FINRA, Lucas R. Mroz was fined $7,500 and suspended from association with any FINRA member in all capacities for 45 days.

Mroz, working as a sales assistant to the registered representative of record for customer accounts, made unauthorized transactions by processing fund transfers from a customer's account based on instructions from the customer's father, who was not authorized to direct transactions in the customer's account. Mroz made three fund transfers, each for $100,000, from the customer's account to her father's account. He inaccurately represented on the firm's verbal authorization forms that he had spoken with the customer when he actually had communicated with her father.

After the customer questioned the transfers, the father transferred the funds back to her account. Mroz did not earn any compensation for the transfers. While the funds were ultimately returned, the unauthorized nature of the transactions created significant risks. The customer did not authorize the transfers, and substantial sums were moved from her account based on instructions from someone who had no authority to direct transactions.

This case highlights the critical importance of ensuring that transaction instructions come from authorized individuals. Account owners are entitled to control their own assets, and transfers should only be executed based on instructions from the account owner or properly authorized representatives. The falsification of verbal authorization forms compounded the violation by creating false documentation suggesting proper authorization had been obtained.

For investors, this case serves as a reminder to monitor account activity carefully and to question any unexpected transactions. It also illustrates the importance of clear account documentation regarding who is authorized to direct transactions. While this situation was resolved with the return of funds, unauthorized transactions can result in significant financial harm, particularly if not detected promptly.

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According to FINRA, Michael Ryan Petruska is facing charges for allegedly failing to amend his Form U4 to disclose that he had been charged with a felony.

A criminal complaint charged Petruska with Indecent Assault and Battery on Child Under Age of 14, a felony under Massachusetts law. While regi...

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According to FINRA, Michael Ryan Petruska is facing charges for allegedly failing to amend his Form U4 to disclose that he had been charged with a felony.

A criminal complaint charged Petruska with Indecent Assault and Battery on Child Under Age of 14, a felony under Massachusetts law. While registered with FINRA through his association with a member firm, Petruska learned he had been charged with the felony but allegedly failed to amend his Form U4 to disclose it. FINRA rules require registered representatives to promptly update their Form U4 to disclose criminal charges, regulatory actions, customer complaints, and other specified events.

The Form U4 disclosure system serves as a critical investor protection tool, allowing the public to research the background of financial professionals through BrokerCheck before deciding whether to do business with them. When registered representatives fail to disclose criminal charges or other significant events, they deprive investors of information that could be material to the decision of whether to entrust that individual with their assets.

The alleged willful failure to disclose a serious felony charge is particularly concerning. Investors have a right to know about criminal charges against their financial advisors, especially charges involving serious alleged misconduct. The disclosure requirement ensures transparency and allows investors to make informed decisions about whom they trust with their financial affairs.

It is important to note that this matter is in the complaint stage, and allegations have not been proven. Petruska is entitled to defend against these charges, and no findings have been made regarding the allegations. For investors, this case underscores the importance of regularly checking BrokerCheck to review the disclosure record of financial professionals and ensuring the information is current and complete.

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According to FINRA, Morgan Stanley Smith Barney LLC was fined $1.6 million for repeated failures to timely close out failed inter-dealer municipal securities transactions and to take prompt steps to obtain physical possession or control of municipal securities positions that were short more than 30 ...

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According to FINRA, Morgan Stanley Smith Barney LLC was fined $1.6 million for repeated failures to timely close out failed inter-dealer municipal securities transactions and to take prompt steps to obtain physical possession or control of municipal securities positions that were short more than 30 calendar days, along with related supervisory failures.

This represents the first disciplinary action in which FINRA charged a firm with violating the close-out requirements of MSRB Rule G-12(h) and related supervisory failures. MSRB Rule G-12(h) requires that failed inter-dealer municipal securities transactions be canceled or closed out no later than 20 calendar days after settlement date. Exchange Act Rule 15c3-3(d)(2) requires broker-dealers to take prompt steps to obtain physical possession or control of securities they failed to receive for more than 30 calendar days.

Morgan Stanley failed to timely cancel or close out 239 inter-dealer municipal transactions aged over 20 calendar days after settlement date with a total value of approximately $9 million from December 2016 through August 2021. Additionally, from January 2016 through August 2021, the firm failed to take required prompt steps to obtain possession or control of 247 municipal securities with a total value of approximately $9.4 million that it had failed to receive for an average of approximately 177 days.

The firm also failed to establish and maintain a supervisory system and written procedures reasonably designed to achieve compliance with these close-out and possession requirements. Morgan Stanley did not modify its system and processes for addressing municipal fails-to-receive until June 2021 or update its procedures until September 2021. This was particularly concerning given that FINRA had previously sanctioned Morgan Stanley for supervisory failures regarding short positions in municipal securities in 2015.

For investors, possession and control requirements exist to protect customer assets and ensure firms maintain adequate controls over securities positions. Failures to close out transactions and obtain possession of securities can create risks to customer assets and undermine market integrity in the municipal securities market.

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According to FINRA, NYPPEX LLC was suspended from FINRA membership for one year and fined $50,000, while Laurence Geoffrey Allen was barred from association with any FINRA member in all capacities, and Michael Joseph Schunk was fined $40,000.

The case centered on a critical regulatory failure: Al...

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According to FINRA, NYPPEX LLC was suspended from FINRA membership for one year and fined $50,000, while Laurence Geoffrey Allen was barred from association with any FINRA member in all capacities, and Michael Joseph Schunk was fined $40,000.

The case centered on a critical regulatory failure: Allen continued to associate with the firm after becoming subject to a statutory disqualification, and the firm and Schunk allowed him to do so without filing the required Membership Continuance Application (MC-400). A New York State court had entered an order against Allen that enjoined him from violating securities fraud statutes and specifically prohibited him from activities related to the purchase or sale of securities. Despite being served with this order, Allen remained associated with the firm for more than one year, with the firm's and Schunk's knowledge and permission.

The findings also revealed that the firm and Allen published misleading statements on the internet that implied FINRA's endorsement of the firm's business practices. Additionally, they failed to provide complete responses to FINRA requests for documents and information, including bank statements and information about Allen's outside business activities and private securities transactions.

This case underscores the importance of statutory disqualification provisions in protecting investors. When a person becomes subject to a disqualification order, firms cannot simply ignore it—they must either terminate the person's association or seek special permission through the MC-400 process. Firms also have an obligation to cooperate fully with regulatory investigations by providing complete and timely responses to information requests. Investors should be aware that FINRA maintains public records of disciplinary actions, and any suggestion that FINRA endorses a particular firm's practices should be viewed with extreme skepticism.

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According to FINRA, Kayan Securities, Inc. was censured and ordered to pay $50,000 in partial restitution to a customer, while principal Yong Soo Kim was fined $5,000 and suspended from association in any principal capacity for two months.

The firm and Kim were found to have failed to establish a...

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According to FINRA, Kayan Securities, Inc. was censured and ordered to pay $50,000 in partial restitution to a customer, while principal Yong Soo Kim was fined $5,000 and suspended from association in any principal capacity for two months.

The firm and Kim were found to have failed to establish and maintain a supervisory system reasonably designed to achieve compliance with suitability requirements and Regulation BI's Care Obligation as they pertain to excessive trading. The firm's supervisory system consisted merely of Kim reviewing daily order logs and monthly active trading reports from the clearing firm, which proved inadequate to detect and prevent excessive and unauthorized trading.

Most troubling was the firm's handling of a registered representative who engaged in unauthorized and excessive trading in customer accounts, including a senior customer's account. Despite multiple red flags, Kim and the firm failed to take appropriate action. Kim never contacted two of the affected customers. When the first customer complained, the firm and Kim failed to conduct a reasonable investigation. For a third customer, Kim merely had the representative obtain a revised account application to change the investment objective and risk tolerance to match the trading that had already occurred. Even when the representative admitted to unauthorized trading, the firm only fined him and allowed him to continue trading in other customer accounts until he was barred by FINRA.

Additionally, the firm failed to properly disclose two customer complaints and failed to update the representative's Form U4 and Form U5 to report written customer complaints alleging sales practice violations.

Investors can learn from this case that effective supervision is essential to protect them from rogue brokers. A supervisory system that relies solely on reviewing reports after the fact, without proactive monitoring or investigation of red flags, is inadequate. Customers should be alert to unauthorized trading in their accounts and should report concerns immediately to both the firm and to FINRA.

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