Bad Brokers

According to FINRA, Bryan Stuart Kocen was barred from association with any FINRA member in all capacities for refusing to produce information and documents and to appear for on-the-record testimony requested by FINRA.

FINRA's requests were made in connection with its net capital cause examinatio...

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According to FINRA, Bryan Stuart Kocen was barred from association with any FINRA member in all capacities for refusing to produce information and documents and to appear for on-the-record testimony requested by FINRA.

FINRA's requests were made in connection with its net capital cause examination of Kocen's member firm. Net capital examinations are critical regulatory reviews that assess whether a broker-dealer maintains the minimum net capital required by SEC and FINRA rules. These requirements exist to ensure that firms have sufficient liquid assets to meet their obligations to customers and other creditors.

The AWC notes that Kocen initially cooperated with FINRA's investigation by providing documents and information and appearing for testimony, but then ceased doing so. This pattern—beginning cooperation and then stopping—suggests that at some point Kocen decided he no longer wanted to continue participating in the examination, perhaps because questions became more difficult or touched on sensitive matters.

The refusal to cooperate with a net capital examination is particularly serious because it prevents FINRA from determining whether the firm is financially sound and whether customer assets are adequately protected. Net capital deficiencies can be early warning signs of a firm in financial distress, and timely regulatory intervention can prevent customer losses. When someone associated with the firm refuses to provide information necessary for the examination, it obstructs FINRA's ability to protect investors.

As someone associated with a member firm during a net capital examination, Kocen would have had information about the firm's financial condition, operations, and compliance with net capital requirements. His refusal to continue cooperating deprived FINRA of potentially material information about the firm's financial stability.

The bar sanction reflects the seriousness of obstructing a regulatory examination, particularly one involving customer protection requirements like net capital. The securities industry depends on registered persons and firms being willing to be transparent and accountable to regulators. Those who are unwilling to cooperate cannot be permitted to continue in the industry.

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According to FINRA, David Charles Burke was barred from association with any FINRA member in all capacities for refusing to appear for on-the-record testimony requested by FINRA.

FINRA's investigation concerned the circumstances giving rise to a Form U5 filed by Burke's member firm. The Form U5 d...

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According to FINRA, David Charles Burke was barred from association with any FINRA member in all capacities for refusing to appear for on-the-record testimony requested by FINRA.

FINRA's investigation concerned the circumstances giving rise to a Form U5 filed by Burke's member firm. The Form U5 disclosed that Burke had been discharged after an affiliate property/casualty company terminated his contract for applying electronic and wet signatures on several property/casualty insurance forms without the consent or knowledge of the insured.

The allegation that Burke applied signatures on insurance forms without customer consent or knowledge is serious. This conduct constitutes forgery and fraud, even if the forms were for insurance products rather than securities. The fact that an affiliated company terminated Burke's contract for this conduct indicates that the conduct was not a minor paperwork error but a significant violation of trust and legal requirements.

When FINRA investigates Form U5 disclosures, it seeks to understand the full circumstances of the conduct, determine whether any securities-related activities were also affected, and assess whether the person poses a risk to investors. Even if the specific misconduct involved insurance products rather than securities, it demonstrates a pattern of dishonesty and disregard for customer rights that is relevant to fitness to work in the securities industry.

By refusing to testify about these allegations, Burke prevented FINRA from understanding exactly what occurred, why it occurred, how many customers were affected, and whether Burke accepted responsibility for his actions. The refusal to testify is itself a serious violation because it obstructs the regulatory process and demonstrates unwillingness to be accountable.

Forgery of customer signatures, whether on securities documents or insurance forms, is a fundamental breach of trust. Customers are entitled to control their own financial affairs and to decide what documents they will sign. When a registered person forges a customer's signature, they usurp the customer's autonomy and potentially expose the customer to obligations or transactions the customer did not authorize.

Investors should never feel pressured to sign documents they don't understand, and they should be present for all signatures on documents related to their accounts. If someone offers to "help" by signing documents on your behalf, that is a serious red flag.

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According to FINRA, Ronald Harland Berg was barred from association with any FINRA member in all capacities for refusing to provide information and documents requested by FINRA.

FINRA's examination focused on Berg's recommendations to multiple senior customers to invest in private offerings and h...

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According to FINRA, Ronald Harland Berg was barred from association with any FINRA member in all capacities for refusing to provide information and documents requested by FINRA.

FINRA's examination focused on Berg's recommendations to multiple senior customers to invest in private offerings and his involvement with customer trusts. Initially, Berg provided a partial but incomplete response that did not substantially comply with FINRA's request. The information and documents he failed to provide were material to the examination. Ultimately, Berg refused to provide additional information and documents.

The examination concerns are significant. Recommendations to senior customers to invest in private offerings raise suitability concerns because private offerings are typically illiquid, high-risk investments that may not be appropriate for seniors who need to preserve capital and maintain liquidity for living expenses. Private offerings also typically lack the disclosure and regulatory protections of registered public offerings, making them riskier for unsophisticated investors.

Berg's involvement with customer trusts is also concerning. Registered representatives should generally not serve as trustees or have other roles in customer trusts because these arrangements create conflicts of interest and opportunities for self-dealing. A broker who controls a customer's trust could make investment decisions that benefit the broker through commissions rather than decisions that are in the customer's best interest.

Berg's initial partial response followed by ultimate refusal to cooperate suggests an attempt to appear cooperative while withholding material information. The fact that he provided some information but not everything requested may indicate that he was trying to control what FINRA could learn about his activities. When FINRA persisted in requesting complete information, Berg refused entirely.

The bar sanction removes Berg from the industry, protecting senior investors and others from someone who recommended potentially unsuitable investments to vulnerable customers and then refused to cooperate when regulators sought to examine his conduct.

Investors, particularly seniors, should be very cautious about private offering investments and should never allow their broker to serve as trustee or have any control over their trust. These arrangements create conflicts of interest and opportunities for abuse.

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According to FINRA, John Scott McCoy Jr. was barred from association with any FINRA member in all capacities for refusing to appear for on-the-record testimony requested by FINRA.

FINRA's investigation concerned allegations that McCoy made electronic fund transfers between bank accounts in his co...

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According to FINRA, John Scott McCoy Jr. was barred from association with any FINRA member in all capacities for refusing to appear for on-the-record testimony requested by FINRA.

FINRA's investigation concerned allegations that McCoy made electronic fund transfers between bank accounts in his control with insufficient funds to cover the transfers. This conduct, commonly known as "check kiting" or "kiting," involves exploiting the float time between when a check or electronic transfer is deposited and when it clears. By moving money between accounts before transfers clear, someone can temporarily create the appearance of having funds that don't actually exist.

Kiting is a form of fraud that can indicate serious financial difficulties. A registered person engaging in this conduct may be experiencing financial pressures that could motivate misconduct in their securities business, such as unsuitable recommendations to generate commissions, unauthorized trading, or even theft of customer funds. Financial difficulties are a major red flag in the securities industry because they can lead to desperation and poor judgment.

Beyond the substantive concern about the alleged kiting, McCoy's refusal to testify prevented FINRA from understanding the full circumstances. Was this a one-time mistake or a pattern of conduct? What was McCoy's financial situation? Were any customer funds involved? Did McCoy's financial difficulties affect his conduct in his securities business? These questions remain unanswered because of McCoy's refusal to cooperate.

The duty to cooperate with FINRA investigations is a fundamental obligation of anyone registered in the securities industry. By refusing to testify about allegations of fraudulent financial conduct, McCoy demonstrated unwillingness to be accountable, which is incompatible with continued work in an industry built on trust.

The bar sanction protects investors by removing from the industry someone who is alleged to have engaged in fraudulent financial conduct and who refused to participate in the regulatory investigation of that conduct. Investors can verify a broker's disciplinary history, including bars, through FINRA's BrokerCheck system.

Financial fraud of any kind is a serious red flag when it involves someone who handles other people's money. Investors should thoroughly research their broker's background and be alert to any signs of financial difficulties or dishonesty.

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

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

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

Geslak falsely 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 conduct constitutes fraud because Geslak made a false certification to a state regulator in order to maintain a professional license.

Continuing education requirements exist to ensure that licensed professionals maintain current knowledge of laws, regulations, products, and industry practices. By having someone else complete the continuing education for her, Geslak deprived herself of the knowledge and training the continuing education was designed to provide. She also defrauded the State of New York by falsely certifying her compliance with licensing requirements.

This type of misconduct demonstrates dishonesty and a willingness to cut corners to avoid professional obligations. While this particular violation involved an insurance license rather than securities licenses, it reflects on Geslak's fitness to work in the securities industry because both industries require honesty and integrity. Someone who will lie to one regulator may be willing to lie to others.

Many registered representatives also hold state insurance licenses because they sell insurance products in addition to securities. The combination of securities and insurance licenses allows representatives to offer a broader range of financial products but also subjects them to multiple regulatory schemes. Representatives who hold both types of licenses must comply with the requirements of all applicable regulators.

The suspension serves as both punishment and deterrent. For one month, Geslak cannot work in the securities industry, resulting in lost income. The fine of $5,000 provides additional deterrence. The disciplinary action will remain on her BrokerCheck record, visible to investors, firms, and regulators.

Investors should verify that their broker maintains proper licenses and completes required continuing education. BrokerCheck shows a broker's current licenses and any disciplinary actions related to licensing violations. Continuing education helps ensure brokers stay current on regulations and products, ultimately protecting investors.

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According to FINRA, Ariel A. Rivero was fined $15,000 and suspended from association with any FINRA member in all capacities for six months.

Rivero caused his member firm to maintain incomplete books and records by using an unapproved instant messaging application to communicate with firm custome...

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According to FINRA, Ariel A. Rivero was fined $15,000 and suspended from association with any FINRA member in all capacities for six months.

Rivero caused his member firm to maintain incomplete books and records by using an unapproved instant messaging application to communicate with firm customers regarding securities-related business. The instant messaging application was not an approved channel for electronic communications, so the firm did not capture or maintain these communications. The messages included obtaining authorization to buy and sell stocks, discussions about account performance, and discussions related to a customer complaint and loan. Rivero also falsely attested that he did not use unapproved messaging services for business-related communications.

Additionally, Rivero borrowed $500,000 from a firm customer without providing prior written notice to or obtaining written approval from the firm. The customer was not an immediate family member or a financial institution, making this a prohibited borrowing arrangement. Rivero has repaid more than half of the amount and is current on his payments, but the loan was not properly disclosed or approved.

Rivero also attempted to settle a customer complaint without notifying his firm. The customer, who was also Rivero's former brother-in-law, complained about losses from investments in non-traditional exchange traded funds. Through the instant messaging application, Rivero offered to reimburse the customer over $300,000 in monthly installments of $10,000. He did not disclose either the complaint or his settlement attempt to his firm. Ultimately, no settlement was reached, and the customer filed an arbitration claim against the firm and Rivero, which the firm later settled.

These violations demonstrate multiple compliance failures. Off-channel communications prevent firms from supervising broker-customer interactions and create opportunities for misconduct outside firm oversight. Undisclosed borrowing creates conflicts of interest—a broker who owes money to a customer cannot provide objective advice. Attempting to settle complaints privately prevents firms from identifying problems and protecting other customers.

Investors should be wary of brokers who want to communicate through personal messaging apps rather than firm channels. They should also never lend money to their broker, as this creates an inappropriate relationship and conflicts of interest.

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

Lewis falsely certified to the State of New York that he had personally completed 15 hours of continuing education required to renew his state insurance license w...

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

Lewis falsely 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, in fact, another person had completed that continuing education on his behalf. This false certification constitutes fraud against the state insurance regulator and demonstrates a lack of integrity.

Continuing education requirements serve an important purpose in maintaining professional competence. Insurance and securities products and regulations evolve over time, and continuing education ensures that licensed professionals stay current. By having someone else complete the required education, Lewis failed to gain the knowledge and skills the education was designed to provide, potentially leaving him less equipped to properly serve his customers.

The willingness to lie to a regulator about compliance with licensing requirements is a serious character issue. It shows a preference for taking shortcuts rather than fulfilling professional obligations honestly. While the immediate violation involved an insurance license rather than securities licenses, it reflects poorly on Lewis's overall fitness to work in financial services.

Many financial professionals hold both securities and insurance licenses, allowing them to offer a comprehensive range of financial products including securities, annuities, and life insurance. These professionals must comply with the requirements of both securities and insurance regulators. A violation of insurance regulations can have consequences for their securities registration as well.

The one-month suspension means Lewis could not work in the securities industry during that time, resulting in lost income. The $5,000 fine provides additional financial consequences. Most importantly, this disciplinary action becomes a permanent part of Lewis's regulatory record, visible to investors who check BrokerCheck and to firms considering employing him.

This case, along with several similar cases in this month's disciplinary actions involving New York insurance continuing education fraud, suggests a broader pattern that FINRA and state insurance regulators identified and pursued. Investors should verify their broker's licensing and disciplinary history through BrokerCheck.

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According to FINRA, Elizabeth Bautista was assessed a deferred fine of $5,000 and suspended from association with any FINRA member in all capacities for one month.

Bautista falsely certified to the State of New York that she had personally completed 15 hours of continuing education required to re...

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According to FINRA, Elizabeth Bautista was assessed a deferred fine of $5,000 and suspended from association with any FINRA member in all capacities for one month.

Bautista falsely 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 conduct constitutes fraud against the state insurance regulator.

The continuing education requirement exists to ensure that licensed insurance professionals maintain current knowledge of insurance products, regulations, and ethical obligations. By having someone else complete the education on her behalf, Bautista circumvented this requirement and obtained her license renewal through false pretenses. She also deprived herself of the knowledge and training the continuing education was intended to provide.

This violation is part of a broader pattern of insurance continuing education fraud that FINRA identified among New York-licensed representatives. Multiple cases in this month's disciplinary actions involve similar conduct, suggesting that FINRA and state insurance regulators conducted a coordinated investigation into this type of fraud.

The deferred fine means that Bautista does not have to pay the $5,000 immediately but the fine will be imposed if she commits any further violations within a specified period. This provides an incentive for compliance going forward while recognizing that this may have been Bautista's first significant violation.

The one-month suspension means Bautista could not work in the securities industry during that time. For someone who works on commission, even a one-month suspension can represent significant lost income. Beyond the immediate financial impact, the disciplinary action remains on Bautista's permanent regulatory record.

Investors who work with representatives that hold both securities and insurance licenses should understand that these professionals are subject to regulation by both securities and insurance regulators. Violations of either set of regulations can affect the representative's ability to work in both industries. BrokerCheck provides comprehensive information about a broker's licenses and any disciplinary history.

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According to FINRA, Edward John Kotak Jr. was fined $5,000 and suspended from association with any FINRA member in all capacities for one month.

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

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According to FINRA, Edward John Kotak Jr. was fined $5,000 and suspended from association with any FINRA member in all capacities for one month.

Kotak falsely 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, in fact, another person had completed that continuing education on his behalf. This false certification represents fraud against the state insurance regulator and demonstrates dishonesty in professional licensing matters.

Continuing education requirements for insurance licenses serve to ensure that licensed professionals maintain current knowledge of products, regulations, and ethical standards. The insurance industry, like the securities industry, is complex and constantly evolving. Continuing education helps professionals stay current and better serve their clients. By having someone else complete the required courses, Kotak avoided the time commitment but also failed to receive the training and knowledge the continuing education was designed to provide.

The fact that multiple representatives from New York were sanctioned in this month's disciplinary actions for the same type of violation suggests that regulators identified a pattern of fraud and pursued enforcement actions against those involved. This demonstrates the importance of cooperation between FINRA and state insurance regulators in maintaining the integrity of professional licensing systems.

Making a false certification to a government agency is a serious matter that reflects on a person's integrity and fitness to work in financial services. Customers trust brokers and insurance agents with their money and rely on them to provide honest advice. Someone willing to lie to regulators about professional licensing requirements may be willing to lie to customers or take other ethical shortcuts.

The one-month suspension prevents Kotak from working in the securities industry during that time, and the $5,000 fine provides additional deterrence. The disciplinary action becomes a permanent part of Kotak's record, accessible through BrokerCheck.

Investors should always verify their financial professional's licensing status and disciplinary history. BrokerCheck provides free access to this information for any FINRA-registered broker or firm.

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According to FINRA, Brandon Daniel Neil was fined $5,000 and suspended from association with any FINRA member in all capacities for three months.

Neil engaged in outside business activities without providing prior written notice to his member firm as required. He worked as a marketing affiliate f...

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According to FINRA, Brandon Daniel Neil was fined $5,000 and suspended from association with any FINRA member in all capacities for three months.

Neil engaged in outside business activities without providing prior written notice to his member firm as required. He worked as a marketing affiliate for a company that was owned and operated by three other firm registered representatives. The company had two lines of business: assisting customers with setting up and operating e-commerce storefronts on established e-commerce platforms, and offering lead-generation websites ("digital real estate") that advertised particular services in particular locations and prompted consumers to provide their information. In his capacity as marketing affiliate, Neil referred potential customers to the company and received commissions if the customers purchased services or digital real estate. In total, Neil received $40,300 in commissions for these referrals.

Additionally, Neil established an LLC through which he personally operated an e-commerce storefront business using services he purchased from the company, also without providing any notice to his firm.

The requirement to provide written notice of outside business activities exists so that firms can evaluate whether the activities create conflicts of interest, make excessive time demands that could interfere with the representative's responsibilities to securities customers, or otherwise pose risks. The firm needs to know about OBAs to conduct appropriate supervision and ensure the representative is meeting their obligations to customers.

In this case, Neil's OBAs are particularly concerning because he was working with a company owned by other representatives from his firm. This suggests a coordinated outside business that multiple representatives were involved in, raising questions about whether they were using their positions at the firm to generate business for their outside company. The fact that Neil was receiving substantial commissions ($40,300) indicates this was not a casual side activity but a significant business venture.

The failure to disclose OBAs prevents firms from identifying potential conflicts and ensuring proper supervision. Investors should be aware that their broker may have other business interests, and they should ask about any outside activities that might affect the advice they receive.

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