Bad Brokers

According to FINRA, Rajesh Markan was barred from association with any FINRA member in all capacities on October 1, 2024, after refusing to provide documents and information requested by FINRA as part of its investigation into the circumstances giving rise to a Form U5 filed by his member firm.

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According to FINRA, Rajesh Markan was barred from association with any FINRA member in all capacities on October 1, 2024, after refusing to provide documents and information requested by FINRA as part of its investigation into the circumstances giving rise to a Form U5 filed by his member firm.

The Form U5 disclosed that Markan was under internal review at the firm for fraud or wrongful taking of property, or violating investment-related statutes, regulations, rules or industry standards of conduct. FINRA requested documents and information from Markan to investigate these serious allegations, but he refused to cooperate.

FINRA Rule 8210 requires associated persons to provide information and documents in connection with FINRA investigations. This rule is essential to FINRA's ability to carry out its regulatory mission of protecting investors. When individuals refuse to cooperate with FINRA investigations, they obstruct FINRA's ability to determine what happened and whether investors were harmed. The penalty for such refusal is severe—a permanent bar from the securities industry.

The allegations on Markan's Form U5 are extremely serious, involving potential fraud or wrongful taking of property. By refusing to provide information to FINRA, Markan prevented FINRA from investigating these allegations and determining the full extent of any misconduct. This leaves investors and the public without answers about what actually occurred.

Investors should understand that when a broker refuses to cooperate with a FINRA investigation, it is a major red flag. While refusing to cooperate does not prove guilt, it suggests the individual has something to hide. Legitimate professionals who have done nothing wrong typically cooperate fully with regulatory investigations to clear their names.

This case demonstrates the importance of FINRA's investigative authority. Without the ability to compel testimony and documents from registered persons, FINRA would be unable to effectively investigate misconduct and protect investors. The automatic bar for refusing to cooperate ensures that individuals cannot simply ignore FINRA investigations with impunity.

Investors can check a broker's disciplinary history, including any bars, through FINRA's BrokerCheck system. A bar for failure to cooperate with an investigation is a permanent mark that will appear on the individual's record and should serve as a warning to any investor considering doing business with that person in any capacity.

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According to FINRA, Daniella R. Rand was barred from association with any FINRA member in all capacities on October 1, 2024, after refusing to produce documents and information requested by FINRA in connection with an investigation originated from a Form U5 filed by her member firm.

The Form U5 d...

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According to FINRA, Daniella R. Rand was barred from association with any FINRA member in all capacities on October 1, 2024, after refusing to produce documents and information requested by FINRA in connection with an investigation originated from a Form U5 filed by her member firm.

The Form U5 disclosed that the firm discharged Rand for failures to report a judgment and comply with a heightened supervision plan. FINRA initiated an investigation into these circumstances and requested documents and information from Rand, but she refused to cooperate.

The requirement to disclose judgments is an important part of the regulatory framework. Judgments can indicate financial irresponsibility or legal problems that may affect a broker's fitness to handle customer assets. Firms often place brokers with compliance issues on heightened supervision plans to monitor their activities more closely and ensure they comply with firm policies and regulatory requirements. Failure to comply with such a plan is a serious matter that can indicate a broker is unwilling or unable to follow rules.

By refusing to provide information to FINRA, Rand prevented FINRA from investigating the circumstances of her discharge and determining whether there were any broader investor protection concerns. This obstruction of FINRA's regulatory authority resulted in a permanent bar from the industry.

Investors should be aware that brokers have affirmative obligations to disclose certain information, including judgments, liens, bankruptcies, and other financial and legal matters. These disclosure requirements exist to help investors make informed decisions about whom they trust with their money. When a broker fails to make required disclosures and is then placed on a heightened supervision plan, it indicates the firm had concerns about the broker's compliance with rules.

The refusal to cooperate with FINRA's investigation compounds the original misconduct. It suggests an unwillingness to be held accountable and a disregard for the regulatory process. Investors can and should check their broker's background through FINRA's BrokerCheck system, which will show disciplinary actions including bars. A bar for failure to cooperate should be viewed as a serious warning sign about the individual's character and commitment to regulatory compliance.

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According to FINRA, Elan Sanker was barred from association with any FINRA member in all capacities on October 4, 2024, after refusing to appear for on-the-record testimony requested by FINRA during the course of an investigation.

The investigation originated from FINRA's review of a Form U5 subm...

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According to FINRA, Elan Sanker was barred from association with any FINRA member in all capacities on October 4, 2024, after refusing to appear for on-the-record testimony requested by FINRA during the course of an investigation.

The investigation originated from FINRA's review of a Form U5 submitted by Sanker's member firm. The Form U5 disclosed that Sanker had been discharged for conduct including entering into a financial arrangement with a client, failure to disclose an outside business activity, and using a personal device for business purposes. FINRA requested that Sanker appear for on-the-record testimony to investigate these matters, but he refused.

Each of the allegations on Sanker's Form U5 represents a serious compliance violation. Entering into financial arrangements with clients creates conflicts of interest and can lead to exploitation of customers. Failure to disclose outside business activities prevents firms from supervising potential conflicts and ensures brokers operate without oversight in activities that could affect their customers. Using personal devices for business purposes circumvents firm supervision and recordkeeping requirements, making it impossible to detect misconduct such as unsuitable recommendations or misrepresentations.

By refusing to appear for testimony, Sanker prevented FINRA from fully investigating these allegations and determining the extent of any harm to investors. On-the-record testimony is a critical investigative tool that allows FINRA to question individuals under oath about their conduct and obtain detailed information about what occurred.

The automatic bar for refusing to testify ensures that individuals cannot evade accountability by simply refusing to participate in the investigative process. This strong enforcement mechanism is necessary to maintain FINRA's ability to regulate the industry effectively and protect investors.

Investors should understand that the allegations on Sanker's Form U5 indicate multiple compliance failures involving conflicts of interest, lack of supervision, and circumvention of recordkeeping requirements. These are the types of violations that can directly harm customers. The refusal to testify suggests Sanker had no good explanation for his conduct and chose to leave the industry rather than face questioning about his actions.

This case reinforces the importance of checking broker backgrounds through FINRA's BrokerCheck system before entrusting anyone with your investments. A bar for failure to cooperate with an investigation is a permanent black mark that will follow the individual and should serve as a clear warning to investors.

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According to FINRA, Gary Francis Harpe was barred from association with any FINRA member in all capacities on October 7, 2024, following an Office of Hearing Officers decision that became final.

Harpe failed to provide documents and information requested by FINRA in connection with its investigat...

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According to FINRA, Gary Francis Harpe was barred from association with any FINRA member in all capacities on October 7, 2024, following an Office of Hearing Officers decision that became final.

Harpe failed to provide documents and information requested by FINRA in connection with its investigation into the circumstances of his termination after his member firm filed a Form U5 disclosing that it had discharged him based on a criminal disclosure. FINRA sought information from Harpe regarding the nature of the criminal charge, as well as potential bankruptcies, judgments, and liens filed against him. Harpe's failure to respond to the requests for documents and information significantly impeded the investigation because it deprived FINRA of material information.

Criminal charges against a broker are extremely serious and can indicate unfitness to handle customer assets and conduct securities business. Brokers are required to disclose criminal charges, and firms must consider whether a broker with criminal charges should be permitted to continue serving customers. The nature of the criminal charge is critical information that FINRA needs to assess whether the individual poses a risk to investors.

Harpe's refusal to provide information about the criminal charge prevented FINRA from determining what crime he was charged with and whether it related to his fitness as a broker. By also refusing to provide information about potential bankruptcies, judgments, and liens, Harpe obstructed FINRA's ability to assess his financial responsibility and overall fitness.

The fact that this case proceeded to a hearing before the Office of Hearing Officers, rather than being resolved through a settlement, demonstrates that Harpe chose to contest the matter despite his refusal to cooperate. The hearing officer found that his failure to respond significantly impeded the investigation by depriving FINRA of material information, justifying the bar.

Investors should understand that brokers have ongoing obligations to disclose criminal charges, bankruptcies, judgments, liens, and other matters that may affect their fitness. These disclosure requirements exist to give investors the information they need to make informed decisions about whom to trust with their money. When a broker refuses to provide information about these matters to regulators, it prevents both FINRA and investors from assessing the broker's trustworthiness and fitness.

This case illustrates that FINRA will pursue bars even when individuals refuse to participate in the process. The permanent bar ensures that Harpe cannot return to the securities industry and potentially harm investors. Investors can view information about this bar through FINRA's BrokerCheck system.

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According to FINRA, Jeffrey Arthur Perryman was barred from association with any FINRA member in all capacities on October 7, 2024, after refusing to provide information and documents requested by FINRA in connection with its investigation into his potential undisclosed outside business activities, ...

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According to FINRA, Jeffrey Arthur Perryman was barred from association with any FINRA member in all capacities on October 7, 2024, after refusing to provide information and documents requested by FINRA in connection with its investigation into his potential undisclosed outside business activities, including charging fees to a customer for services that he failed to disclose to his member firm.

Outside business activities must be disclosed to firms so they can assess potential conflicts of interest and ensure appropriate supervision. When brokers engage in undisclosed outside business activities, particularly those involving customers, it creates significant risks. The broker may be providing services without firm oversight, making unsuitable recommendations to generate business for the outside activity, or engaging in outright fraud.

The allegation that Perryman charged fees to a customer for undisclosed services is particularly concerning. This suggests he may have been operating a side business involving customers without the firm's knowledge or approval. Such arrangements create obvious conflicts of interest and raise questions about whether the customer understood what services were being provided and whether the fees were appropriate.

By refusing to provide information and documents about these activities, Perryman prevented FINRA from investigating the nature of his outside business activities, what services he provided to customers, how much he charged, and whether customers were harmed. This obstruction of FINRA's investigation resulted in a permanent bar from the industry.

Investors should be wary of brokers who request fees for services outside the normal brokerage relationship. If a broker asks you to pay for consulting, financial planning, or other services separately from your brokerage account, you should ask detailed questions about what services are being provided, whether the firm has approved this arrangement, and whether the fees are reasonable. Legitimate services should be documented in writing with clear fee schedules.

The refusal to cooperate with FINRA's investigation suggests Perryman had no good explanation for his outside business activities and the fees he charged. This case demonstrates why disclosure requirements for outside business activities exist—they protect investors from conflicts of interest and ensure firms can properly supervise their representatives.

Investors can check whether their broker has been barred or has any disciplinary history through FINRA's BrokerCheck system. A bar for refusing to cooperate with an investigation about undisclosed outside business activities should raise serious concerns about the individual's integrity and trustworthiness.

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According to FINRA, Robert Anthony Daly was barred from association with any FINRA member in all capacities on October 8, 2024, after refusing to produce information and documents requested by FINRA during an investigation that originated from a regulatory tip related to possible undisclosed private...

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According to FINRA, Robert Anthony Daly was barred from association with any FINRA member in all capacities on October 8, 2024, after refusing to produce information and documents requested by FINRA during an investigation that originated from a regulatory tip related to possible undisclosed private securities transactions.

Private securities transactions, often called "selling away," occur when a broker conducts securities transactions outside the scope of their employment with their firm. These transactions are called "selling away" because the broker is selling securities away from the firm's supervision and control. Such transactions must be disclosed to the firm, and in many cases, the firm must approve them before the broker can participate.

Selling away is one of the most dangerous forms of broker misconduct from an investor's perspective. When brokers engage in undisclosed private securities transactions, investors lose the protections that come with firm supervision, including due diligence on the investment, oversight of sales practices, and firm liability if something goes wrong. Many high-profile Ponzi schemes and fraudulent investment scams have been perpetrated through selling away arrangements.

The fact that FINRA's investigation originated from a regulatory tip suggests that someone—possibly an investor, another broker, or a firm compliance officer—reported concerns about Daly's activities. FINRA sought information and documents to investigate whether Daly had engaged in undisclosed private securities transactions, but he refused to cooperate.

By refusing to provide information, Daly prevented FINRA from determining whether he engaged in selling away, what investments were involved, how many investors were affected, and whether investors lost money. This obstruction resulted in a permanent bar from the securities industry.

Investors should be extremely cautious if a broker approaches them about investment opportunities that are not offered through the broker's firm. Before investing in any private placement, limited partnership, or other alternative investment recommended by a broker, investors should verify that the broker's firm has approved the transaction and that the investment has undergone appropriate due diligence.

Red flags for selling away include: investments not reflected on your brokerage account statement, requests to make checks payable to anyone other than your brokerage firm, investments in entities where the broker has a personal interest, and pressure to invest quickly without thorough documentation.

Daly's refusal to cooperate with FINRA's investigation suggests he had something to hide regarding his private securities activities. This bar protects investors from potential harm by ensuring Daly cannot continue operating in the securities industry.

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According to FINRA, Kimberly Ann Clark was barred from association with any FINRA member in all capacities on October 9, 2024, after refusing to provide documents and information requested by FINRA in connection with its investigation into the circumstances giving rise to an amended Form U5 filed by...

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According to FINRA, Kimberly Ann Clark was barred from association with any FINRA member in all capacities on October 9, 2024, after refusing to provide documents and information requested by FINRA in connection with its investigation into the circumstances giving rise to an amended Form U5 filed by her former member firm.

The firm amended Clark's Form U5 to disclose that she resigned while under review related to alleged misuse of funds associated with an outside business activity. This is a serious allegation that suggests Clark may have improperly used money from an outside business, potentially including customer funds or funds that were supposed to be used for a specific purpose.

Outside business activities are already subject to heightened scrutiny because they create potential conflicts of interest with a broker's securities business. When allegations arise that a broker misused funds associated with an outside business activity, it raises serious questions about the broker's integrity and fitness to handle customer assets.

By refusing to provide information to FINRA, Clark prevented FINRA from investigating what outside business activity she was engaged in, what funds were allegedly misused, how much money was involved, and whether any customers or other parties were harmed. The refusal to cooperate suggests Clark had no innocent explanation for the allegations and chose to leave the industry rather than face scrutiny of her conduct.

The fact that Clark resigned while under review indicates she knew the firm was investigating her and chose to leave before the investigation concluded. Firms often accept resignations in such circumstances, but they still must file an amended Form U5 to disclose the reason for the investigation. This ensures that the regulatory record reflects the circumstances of the departure, even though no final determination was made.

Investors should understand that when a broker resigns while under investigation, it does not mean the allegations were false or unsubstantiated. It often means the broker chose to leave rather than face the consequences of the investigation. The amended Form U5 disclosure provides important information to future employers and investors about the circumstances of the departure.

Clark's refusal to cooperate with FINRA's investigation resulted in a permanent bar, ensuring she cannot return to the securities industry. Investors can check a broker's employment history and any bars or other disciplinary actions through FINRA's BrokerCheck system. A resignation while under review followed by a bar for failure to cooperate is a serious red flag about an individual's trustworthiness.

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According to FINRA, Michael Lancaster was barred from association with any FINRA member in all capacities on October 9, 2024, after refusing to produce written information and documents requested by FINRA in connection with its investigation surrounding his termination from his member firm.

The i...

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According to FINRA, Michael Lancaster was barred from association with any FINRA member in all capacities on October 9, 2024, after refusing to produce written information and documents requested by FINRA in connection with its investigation surrounding his termination from his member firm.

The investigation originated from FINRA's review of a Form U5 filed by Lancaster's firm stating that he was discharged due to concerns he did not adhere to the firm's complaints policy. Firms have policies requiring representatives to promptly report customer complaints and cooperate with the firm's investigation of complaints. These policies are essential to ensure that customer concerns are addressed and that patterns of problematic behavior are identified and corrected.

Failure to adhere to a firm's complaints policy can take many forms, including failing to report customer complaints to the firm, attempting to resolve complaints directly with customers without firm involvement, or failing to cooperate with the firm's investigation of complaints. Each of these scenarios is problematic because it prevents the firm from properly supervising the representative and addressing customer concerns through appropriate channels.

By refusing to provide information to FINRA, Lancaster prevented FINRA from investigating the specific nature of his failure to adhere to the complaints policy, whether any customers were harmed, and whether there were broader compliance issues. This obstruction resulted in a permanent bar from the securities industry.

Investors should understand the importance of following proper procedures when making complaints about their broker. Complaints should be submitted to the firm in writing, and investors should keep records of all communications. If a broker attempts to handle a complaint informally or discourages an investor from contacting the firm's compliance department, that is a red flag. Firms need to know about customer complaints to properly supervise their representatives and identify problematic patterns.

The requirement that brokers adhere to complaint policies exists to protect investors and ensure that complaints are properly investigated and resolved. When brokers circumvent these policies, it suggests they are trying to hide their misconduct from firm supervision.

Lancaster's refusal to cooperate with FINRA's investigation suggests he had no good explanation for his failure to adhere to the complaints policy and chose to accept a permanent bar rather than provide information about his conduct. This bar protects investors by ensuring Lancaster cannot continue working in the securities industry. Investors can check broker backgrounds, including any bars, through FINRA's BrokerCheck system.

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According to FINRA, Thomas James Baumann was barred from association with any FINRA member in all capacities on October 15, 2024, following an Office of Hearing Officers decision that became final.

Baumann failed to provide documents and information requested by FINRA in connection with its inves...

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According to FINRA, Thomas James Baumann was barred from association with any FINRA member in all capacities on October 15, 2024, following an Office of Hearing Officers decision that became final.

Baumann failed to provide documents and information requested by FINRA in connection with its investigation that focused on his potentially excessive and unsuitable trading in customer accounts at his member firm. During the investigation, Baumann initially appeared for three on-the-record interviews. Subsequently, his firm filed an amended Form U5 disclosing potentially unauthorized trading by Baumann in another customer account, not one of the customers then under review.

FINRA issued information requests to investigate the newly disclosed allegation of unauthorized trading. However, Baumann failed to respond to those requests. FINRA needed the information it sought from Baumann—evidence of his communications with the customer—to determine if Baumann could explain his trading in the account. These were essential elements for FINRA to make a determination of whether Baumann traded in the account without authorization. By not responding to the requests, Baumann frustrated FINRA's effort to gather the facts to complete the investigation.

Unauthorized trading is one of the most serious forms of broker misconduct. It occurs when a broker executes trades in a customer's account without the customer's knowledge or permission. This violates the fundamental principle that customers control their own accounts and must authorize trades. Unauthorized trading can result in significant losses for customers and, even when trades are profitable, violates the customer's right to control their investments.

The fact that Baumann initially cooperated by appearing for three interviews but then refused to provide information about the newly discovered allegation of unauthorized trading is particularly telling. It suggests he was willing to defend against the original allegations of excessive and unsuitable trading but had no defense for the unauthorized trading allegation.

By refusing to provide communications with the customer, Baumann prevented FINRA from determining whether he had obtained authorization for the trades. If Baumann had innocent explanations or evidence that the customer authorized the trades, he presumably would have provided that information. The refusal to cooperate suggests the evidence would have been incriminating.

Investors who suspect their broker may have executed unauthorized trades should immediately review their account statements and confirmations, contact the firm's compliance department to file a complaint, and consider consulting with an attorney. Unauthorized trading is a serious violation that can form the basis for recovering losses through arbitration.

Baumann's bar ensures he cannot continue in the securities industry and potentially engage in unauthorized trading with other customers. Investors can check broker disciplinary histories, including bars, through FINRA's BrokerCheck system.

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According to FINRA, Mark Gilbert Beesley was barred from association with any FINRA member in all capacities on October 17, 2024, after refusing to appear for on-the-record testimony requested by FINRA in connection with an investigation concerning whether he had engaged in undisclosed outside busin...

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According to FINRA, Mark Gilbert Beesley was barred from association with any FINRA member in all capacities on October 17, 2024, after refusing to appear for on-the-record testimony requested by FINRA in connection with an investigation concerning whether he had engaged in undisclosed outside business activities.

Outside business activities must be disclosed to firms so they can assess potential conflicts of interest, ensure appropriate supervision, and determine whether the activities are compatible with the representative's duties to customers. Common outside business activities include serving as an officer or director of a company, operating a side business, or providing consulting or other services outside the scope of the brokerage relationship.

Undisclosed outside business activities are problematic for several reasons. First, they create potential conflicts of interest that the firm cannot manage if it doesn't know about them. For example, a broker might recommend investments that benefit their outside business rather than serving customers' best interests. Second, outside business activities can be time-consuming and distract from the broker's duties to customers. Third, some outside business activities involve providing investment advice or selling securities, which should be done through the firm with appropriate supervision.

By refusing to appear for testimony, Beesley prevented FINRA from investigating what outside business activities he was engaged in, why he failed to disclose them, whether they created conflicts of interest, and whether any customers were harmed. On-the-record testimony is particularly important in investigations because it allows FINRA to ask detailed questions and obtain sworn statements about the individual's conduct.

The refusal to appear for testimony suggests Beesley had no innocent explanation for his undisclosed outside business activities and chose to accept a permanent bar rather than answer questions about his conduct under oath. This is a strong indication that the activities were problematic and potentially harmful to customers.

Investors should be aware that their broker may engage in outside business activities, but those activities should be disclosed to the firm. If a broker approaches you about a business opportunity or service that seems unrelated to your brokerage account, ask whether the firm has approved this activity. Legitimate outside business activities will be properly disclosed and approved.

Red flags for problematic outside business activities include: requests to invest in businesses where the broker has a personal interest, opportunities that the broker describes as "off the books" or separate from the firm, and pressure to keep the arrangement confidential.

Beesley's bar ensures he cannot continue in the securities industry. Investors can check broker backgrounds and disciplinary actions through FINRA's BrokerCheck system.

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