Bad Brokers

According to FINRA, Billy Pascal Stanage Jr. was barred from association with any FINRA member in all capacities for refusing to provide documents and information requested by FINRA in connection with its investigation of circumstances surrounding his termination from his member firm.

Stanage's f...

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According to FINRA, Billy Pascal Stanage Jr. was barred from association with any FINRA member in all capacities for refusing to provide documents and information requested by FINRA in connection with its investigation of circumstances surrounding his termination from his member firm.

Stanage's firm filed a Form U5 stating that it had discharged him for failing to obtain firm approval for an outside business activity. Subsequently, the firm filed an amended Form U5 disclosing that its internal review determined that Stanage had obtained a loan from a client without seeking firm approval.

Borrowing money from clients is a serious compliance violation that creates conflicts of interest and potential for abuse. Firms must review and approve such arrangements to ensure they are appropriate and do not harm customers. When representatives refuse to cooperate with investigations into such conduct, it prevents regulators from determining the facts and protecting other potential victims.

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According to FINRA, Drew Stegman was barred from association with any FINRA member in all capacities for refusing to complete on-the-record testimony requested by FINRA in connection with its investigation into his potential penny stock promotion activities on various social media platforms.

Steg...

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According to FINRA, Drew Stegman was barred from association with any FINRA member in all capacities for refusing to complete on-the-record testimony requested by FINRA in connection with its investigation into his potential penny stock promotion activities on various social media platforms.

Stegman initially appeared for testimony; however, halfway through he refused to answer any further questions and indicated that he would not continue to cooperate with FINRA in the future. This partial cooperation followed by refusal is particularly troubling, as it suggests Stegman may have realized during the testimony that his conduct was problematic.

Penny stock promotions on social media can mislead investors and manipulate stock prices. When registered representatives engage in such activities, they violate their obligations to deal fairly with investors and comply with securities laws. Stegman's refusal to complete his testimony prevented FINRA from fully investigating these potential violations and protecting investors from misleading penny stock promotions.

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According to FINRA, Joseph Francis Bartosiewicz Jr. was barred from association with any FINRA member in all capacities for refusing to provide documents and information requested by FINRA during the course of an investigation into his conduct following his former member firm's AWC.

When firms en...

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According to FINRA, Joseph Francis Bartosiewicz Jr. was barred from association with any FINRA member in all capacities for refusing to provide documents and information requested by FINRA during the course of an investigation into his conduct following his former member firm's AWC.

When firms enter into AWCs (Acceptance, Waiver and Consent agreements) with FINRA, the investigation often extends to the individual representatives involved in the misconduct. Representatives are required to cooperate with these follow-up investigations to ensure that individual accountability is maintained and to protect investors from future harm.

Bartosiewicz's refusal to cooperate prevented FINRA from determining his role in the firm's misconduct and assessing appropriate individual sanctions. This case demonstrates that cooperation with FINRA is mandatory, and those who refuse face automatic expulsion from the industry.

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According to FINRA, Lynn Witherspoon Bryant was barred from association with any FINRA member in all capacities for refusing to appear for on-the-record testimony requested by FINRA in connection with its investigation into whether she engaged in private securities transactions without providing pri...

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According to FINRA, Lynn Witherspoon Bryant was barred from association with any FINRA member in all capacities for refusing to appear for on-the-record testimony requested by FINRA in connection with its investigation into whether she engaged in private securities transactions without providing prior written notice to, and receiving prior written approval from, her member firm.

Private securities transactions, often called "selling away," occur when registered representatives sell securities outside their firm's supervision. This practice is prohibited unless the firm is notified and approves the transaction. Selling away exposes investors to unsuitable investments, fraud, and lack of regulatory oversight.

When representatives refuse to testify about potential selling away, they prevent FINRA from determining whether investors were exposed to inappropriate investments and ensuring that proper supervision was in place. Bryant's refusal to cooperate resulted in a bar from the industry.

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According to FINRA, John Charles Jacobsen was barred from association with any FINRA member in all capacities for refusing to provide documents and information requested by FINRA in connection with its investigation of circumstances surrounding his termination from his member firm.

The firm filed...

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According to FINRA, John Charles Jacobsen was barred from association with any FINRA member in all capacities for refusing to provide documents and information requested by FINRA in connection with its investigation of circumstances surrounding his termination from his member firm.

The firm filed a Form U5 stating that it had discharged Jacobsen due to concerns that he submitted transactions under production numbers that were inconsistent with an agreement with another representative, resulting in a shortfall of revenue credited to the other representative.

This type of conduct involves misallocating commissions and revenues, which can constitute fraud against fellow representatives and potentially impact customer account management. When representatives manipulate production numbers to improperly claim revenue, it suggests a lack of integrity that raises concerns about their fitness to handle customer assets.

Jacobsen's refusal to cooperate with the investigation into these allegations resulted in an automatic bar from the industry, protecting investors from individuals who lack the transparency and honesty required in the securities industry.

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According to FINRA, Eric Ryan Tartaglione was barred from association with any FINRA member in all capacities for refusing to provide on-the-record testimony requested by FINRA in connection with its investigation into the sales of pre-Initial Public Offering (IPO) private placement offerings.

Pr...

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According to FINRA, Eric Ryan Tartaglione was barred from association with any FINRA member in all capacities for refusing to provide on-the-record testimony requested by FINRA in connection with its investigation into the sales of pre-Initial Public Offering (IPO) private placement offerings.

Pre-IPO private placements are often high-risk investments that may be unsuitable for many investors. These offerings are typically unregistered securities that can only be sold to accredited investors under specific exemptions from registration. FINRA's investigation likely involved questions about whether the offerings were properly structured, whether investors were suitable, and whether representatives complied with securities laws.

Tartaglione's refusal to testify about these sales prevented FINRA from determining whether investors were protected and whether the offerings complied with applicable securities laws. This refusal resulted in his permanent bar from the industry. Investors should be cautious about pre-IPO investments and ensure they fully understand the risks involved.

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According to FINRA, Miche D. Jean was barred from association with any FINRA member in all capacities for failing to provide information and documents or appear for on-the-record testimony requested by FINRA in connection with an investigation into whether he converted money from his customer.

FI...

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According to FINRA, Miche D. Jean was barred from association with any FINRA member in all capacities for failing to provide information and documents or appear for on-the-record testimony requested by FINRA in connection with an investigation into whether he converted money from his customer.

FINRA's investigation began after reviewing a Consent Order issued by the Maryland Securities Commissioner. In that order, Jean consented to findings that, while associated with his member firm, he fraudulently initiated four Automated Clearing House (ACH) transfers from a firm customer's brokerage account to pay his personal credit card bill. The Consent Order imposed sanctions that barred Jean from engaging in the securities or investment advisory business in Maryland.

Conversion of customer funds is one of the most serious violations in the securities industry. It constitutes theft and a complete breach of the fiduciary duty owed to customers. Jean's refusal to cooperate with FINRA's investigation into this conduct, combined with the state regulator's findings, resulted in a permanent bar from the industry.

This case illustrates the importance of monitoring account activity and immediately reporting any unauthorized transactions. Investors should regularly review their account statements and confirm that all transactions were authorized.

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According to FINRA, David Harrison Miller was barred from association with any FINRA member in all capacities for refusing to appear for on-the-record testimony requested by FINRA in connection with its investigation into the suitability of his investment recommendations to customers.

Suitability...

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According to FINRA, David Harrison Miller was barred from association with any FINRA member in all capacities for refusing to appear for on-the-record testimony requested by FINRA in connection with its investigation into the suitability of his investment recommendations to customers.

Suitability is a fundamental requirement in the securities industry. Representatives must have a reasonable basis to believe that a recommended transaction or investment strategy is suitable for the customer based on the customer's investment profile, including age, financial situation, investment objectives, and risk tolerance.

When representatives refuse to testify about the suitability of their recommendations, it prevents FINRA from determining whether customers were protected and whether the representative complied with fundamental investor protection rules. Miller's refusal to cooperate resulted in a permanent bar from the industry, protecting investors from a representative unwilling to be held accountable for his recommendations.

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According to FINRA, Robert Charles Starnes was barred from association with any FINRA member in all capacities for refusing to appear for on-the-record testimony requested by FINRA in connection with a matter that originated from a customer complaint made to FINRA.

Customer complaints are an impo...

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According to FINRA, Robert Charles Starnes was barred from association with any FINRA member in all capacities for refusing to appear for on-the-record testimony requested by FINRA in connection with a matter that originated from a customer complaint made to FINRA.

Customer complaints are an important source of information about potential misconduct in the securities industry. When FINRA receives customer complaints, it investigates to determine whether violations occurred and whether other customers may have been harmed. Registered representatives are required to cooperate with these investigations.

Starnes' refusal to testify about the customer complaint prevented FINRA from determining the facts and assessing whether investor protection measures were needed. This lack of cooperation resulted in his permanent expulsion from the industry, demonstrating that FINRA takes seriously the obligation to participate in investigations designed to protect investors.

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According to FINRA, Dominic Joseph Carlo was fined $2,500 and suspended from association with any FINRA member for 10 business days for exercising discretion with respect to transactions involving customers without prior written authorization from the customers and without his member firm having acc...

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According to FINRA, Dominic Joseph Carlo was fined $2,500 and suspended from association with any FINRA member for 10 business days for exercising discretion with respect to transactions involving customers without prior written authorization from the customers and without his member firm having accepted the accounts as discretionary.

The customers had given Carlo oral or implicit authorization for the transactions; however, none provided prior written authorization. Discretionary authority allows representatives to decide which securities to buy or sell and the amount without consulting the customer for each transaction. Written authorization is required to protect customers from unauthorized trading and ensure they understand the scope of authority granted.

Carlo also completed and submitted compliance questionnaires to the firm that inaccurately stated that he had not exercised discretionary authority in customer accounts. This false attestation is a separate violation that demonstrates a lack of candor with his firm.

Investors should understand that granting discretionary authority is a significant decision that should only be done in writing after careful consideration. Representatives who exercise discretion without proper authorization violate customer trust and regulatory requirements.

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