Bad Brokers

According to FINRA, Kevin Anthony Zappia was fined $2,500 and suspended from association with any FINRA member in all capacities for 15 business days for causing his member firm to make and preserve inaccurate books and records by mismarking order tickets as unsolicited when the securities transacti...

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According to FINRA, Kevin Anthony Zappia was fined $2,500 and suspended from association with any FINRA member in all capacities for 15 business days for causing his member firm to make and preserve inaccurate books and records by mismarking order tickets as unsolicited when the securities transactions were actually solicited.

The distinction between solicited and unsolicited orders is fundamental to broker-dealer compliance. When brokers recommend securities transactions to customers (solicited orders), they have suitability obligations requiring reasonable basis to believe the recommendations are appropriate based on customers' financial situations and investment objectives. When customers initiate transactions without broker recommendations (unsolicited orders), different and more limited suitability obligations apply. By mismarking solicited orders as unsolicited, Zappia created false records that concealed his recommendations from supervisory review.

This type of mismarking can serve several purposes, all problematic. It can hide unsuitable recommendations from compliance reviews that flag potentially inappropriate solicited transactions. It can help brokers avoid scrutiny of their recommendation patterns. And it can prejudice customers in disputes by creating false documentation suggesting customers initiated transactions that were actually recommended by brokers. Supervisory systems rely on accurate order markings to identify accounts requiring closer review for suitability concerns.

The violation of causing the firm to maintain inaccurate books and records undermines the integrity of the regulatory framework. Books and records rules are foundational to securities regulation, enabling firms to supervise representatives, enabling regulators to examine firms and investigate misconduct, and providing evidence for resolving customer complaints and arbitrations. When representatives falsify these records, it impairs all of these critical functions. For investors, this case reinforces the importance of maintaining personal records of interactions with financial professionals. While order tickets are firm records that investors typically do not see, investors should keep notes of what recommendations were made, when, and the reasons given. In the event of disputes, these contemporaneous notes can be valuable evidence to counter potentially falsified order tickets. Investors should review account statements carefully and should question any transactions that do not align with their understanding of what was recommended or that seem unsuitable based on their investment objectives and risk tolerance. Any concerns should be raised promptly with firm compliance departments and, if necessary, with FINRA.

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According to FINRA, Mark Bedros Beloyan was assessed a deferred fine of $60,000, suspended from association with any FINRA member in all capacities for two years, and ordered to pay deferred disgorgement of $27,260 in commissions plus prejudgment interest for facilitating the liquidation of nearly 2...

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According to FINRA, Mark Bedros Beloyan was assessed a deferred fine of $60,000, suspended from association with any FINRA member in all capacities for two years, and ordered to pay deferred disgorgement of $27,260 in commissions plus prejudgment interest for facilitating the liquidation of nearly 23 million shares of common stock to the investing public when there was no registration statement filed or in effect or exemption from registration available, acting in contravention of Section 5 of the Securities Act of 1933.

The customers who liquidated these shares through Beloyan's member firm generated proceeds of approximately $577,000 in these violative transactions. Beloyan was a necessary participant and substantial factor in these illegal sales because he opened all customer accounts, reviewed and approved all stock deposits, executed all sales through the firm, served as the registered representative for the accounts, and was solely responsible for all supervision and compliance functions at the firm. As the firm's AML compliance officer, Beloyan was responsible for supervision and compliance with FINRA rules and federal securities laws.

Beloyan failed to supervise for compliance with the Securities Act. In violation of the firm's written supervisory procedures, he failed to investigate red flags of violative activity and failed to conduct due diligence sufficient to determine if the share sales were registered or exempt from registration. He was aware, or through reasonable diligence should have been aware, of facts supporting the conclusion that these sales were part of an unregistered distribution. Additionally, Beloyan failed to implement an AML program reasonably designed to achieve and monitor compliance with the Bank Secrecy Act, including the ability to detect and cause reporting of suspicious activities.

The findings also included that Beloyan was aware of numerous red flags of potentially suspicious activity in connection with a different group of customer accounts. The firm, Beloyan, and another representative opened three nominee accounts for customers of an individual whom the SEC had twice sued in connection with unrelated penny-stock manipulation schemes. When the clearing firm asked directly about the relationship of that individual to one nominee customer, Beloyan misrepresented the nature of the relationship and denied the individual's involvement despite both Beloyan and the representative having taken instructions directly from that individual. Thereafter, Beloyan ignored numerous red flags including trading of six different penny stocks before the clearing firm closed the nominee accounts.

For investors, this case illustrates the serious risks of unregistered penny stock distributions and the importance of broker-dealer compliance systems. Section 5 of the Securities Act requires that securities offered to the public either be registered with the SEC or qualify for an exemption from registration. Registration requirements exist to ensure investors receive material information about securities before investing. When brokers facilitate unregistered sales without available exemptions, they enable fraud and expose investors to unregistered securities that may be worthless. The involvement of nominee accounts, an individual with history of SEC enforcement actions, and penny stocks are all red flags of potential manipulation schemes. Investors should be extremely cautious about penny stock investments and should verify that any securities purchases are either registered or properly exempt from registration.

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According to FINRA, Brian Francis Giammona was assessed a deferred fine of $5,000 and suspended from association with any FINRA member in all capacities for three months for improperly processing wire transfer requests from member firm customers by falsely stating on wire transfer documents that he ...

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According to FINRA, Brian Francis Giammona was assessed a deferred fine of $5,000 and suspended from association with any FINRA member in all capacities for three months for improperly processing wire transfer requests from member firm customers by falsely stating on wire transfer documents that he had verbally spoken with the customers and confirmed their identity. Giammona instead processed wires according to requests made by customers over email, without any verbal confirmation.

Wire transfer procedures exist to protect customers from unauthorized withdrawals and theft. Verbal confirmation requirements serve as a security measure to ensure that wire requests actually come from legitimate account holders and not from identity thieves or hackers who have gained access to email accounts. By circumventing these security procedures, Giammona exposed customers to the risk that fraudulent wire requests could be processed without proper verification.

Giammona not only failed to follow the required verification procedures but also actively falsified documentation by attesting that he had performed verification steps that he had not actually performed. He either falsely documented that customers had correctly answered authentication questions or falsely attested that he had ascertained customers' identities with 100% confidence. These false attestations were not mere paperwork violations—they represented a systematic failure to follow security procedures combined with dishonesty about compliance.

In addition to the security risks, Giammona's conduct caused his firm to maintain inaccurate books and records. The wire transfer documentation was supposed to reflect the verification steps actually performed, but instead reflected fictitious verification. This impaired the firm's ability to maintain reliable records and to demonstrate compliance with its own procedures. For investors, this case highlights the importance of security procedures around wire transfers and other movements of funds out of investment accounts. While verification procedures can sometimes seem burdensome, they exist to protect customers from fraud and unauthorized transactions. Investors should be concerned if financial professionals seem to be cutting corners on security procedures. The fact that Giammona's falsifications involved processing wires based on email requests is particularly concerning given the prevalence of email compromise schemes where criminals gain access to email accounts and send fraudulent wire requests. Customers should understand that firms' security procedures, including requirements for verbal confirmation, are designed to protect them. Anyone who circumvents these procedures, even seemingly for convenience, creates serious security risks.

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According to FINRA, Salvatore Gambino was assessed a deferred fine of $5,000, suspended from association with any FINRA member in all capacities for four months, and ordered to pay $3,500 plus interest in deferred partial restitution to a customer (two other customers will not receive partial restit...

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According to FINRA, Salvatore Gambino was assessed a deferred fine of $5,000, suspended from association with any FINRA member in all capacities for four months, and ordered to pay $3,500 plus interest in deferred partial restitution to a customer (two other customers will not receive partial restitution because they previously settled their claims with Gambino's member firm) for making unsuitable recommendations in speculative alternative investments to three firm customers that were inconsistent with the customers' investment profiles.

Gambino recommended that the customers purchase GPB Automotive Portfolio limited partnership interests, and these recommendations were unsuitable based on the customers' age, income, net worth, risk tolerance, and status as unaccredited investors. For one customer, Gambino's recommendation resulted in over-concentration of the customer's liquid net worth in alternative investments. GPB Capital has been the subject of extensive regulatory scrutiny, with SEC enforcement actions alleging that GPB operated as a Ponzi-like scheme that used new investor money to pay purported returns to existing investors while misrepresenting the source of these payments.

Alternative investments such as limited partnerships typically involve higher risks than traditional securities including illiquidity (inability to sell the investment when desired), lack of transparency, complex structures, higher fees, and potential for total loss. These investments are often restricted to accredited investors—individuals meeting minimum income or net worth thresholds—because of their risk profiles. By recommending these investments to unaccredited investors, Gambino exposed customers to risks that regulations specifically aim to prevent.

Concentration risk is a fundamental investment principle—having too much of one's portfolio in any single asset class or investment creates vulnerability to catastrophic losses if that investment performs poorly. When one customer's liquid net worth became over-concentrated in alternative investments as a result of Gambino's recommendations, it meant the customer lacked sufficient liquidity and diversification to weather potential losses. The fact that customers settled claims with the firm and that FINRA ordered restitution indicates that these unsuitable recommendations resulted in actual losses.

For investors, this case underscores several important lessons about alternative investments. First, understand that limited partnerships and other alternative investments involve substantially higher risks than traditional stocks and bonds. Second, ensure that alternative investments, if appropriate at all, represent only a small portion of a well-diversified portfolio. Third, verify that you meet accredited investor requirements if they apply, and question why an investment would be appropriate if you don't meet these thresholds. Fourth, be particularly cautious about alternative investments that are being widely marketed, as the GPB products were—broader distribution can be a warning sign of aggressive sales practices. Finally, before investing in any alternative investment, conduct thorough due diligence including reviewing offering documents carefully, verifying claims independently, and consulting with advisors who do not have financial interests in the transaction.

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According to FINRA, Nathan Wilks was assessed a deferred fine of $10,000 and suspended from association with any FINRA member in all capacities for nine months for willfully failing to amend his Form U4 to disclose unsatisfied judgments totaling approximately $320,000, and for falsifying a receipt t...

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According to FINRA, Nathan Wilks was assessed a deferred fine of $10,000 and suspended from association with any FINRA member in all capacities for nine months for willfully failing to amend his Form U4 to disclose unsatisfied judgments totaling approximately $320,000, and for falsifying a receipt that he submitted to his firm during an investigation into his financial condition.

Although Wilks was aware of a judgment entered in Illinois state court and had filed a motion seeking to vacate it, he answered no to the Form U4 question asking about judgments. Wilks also falsely attested in a firm compliance questionnaire that he did not have any judgments entered against him. Following a firm inquiry, Wilks belatedly disclosed the Illinois judgment on his Form U4. However, Wilks never amended his Form U4 to disclose a judgment entered against him by a Wisconsin circuit court during a hearing where he appeared via telephone. Further, Wilks learned of additional outstanding judgments through correspondence with FINRA but never amended his Form U4 to disclose these judgments.

Form U4 disclosure requirements serve critical investor protection functions. Investors and firms need to know about judgments against registered persons because they may indicate financial instability, legal problems, or other issues relevant to fitness. Willful failures to disclose required information demonstrate lack of candor and unwillingness to be transparent about matters that could concern investors. The fact that Wilks failed to disclose approximately $320,000 in judgments is particularly serious given the magnitude and the suggestion of significant financial problems.

Compounding these failures, Wilks falsified a receipt during the firm's investigation into his financial condition. After the firm learned of the outstanding judgments and commenced an investigation, Wilks stated during a meeting that he was not aware of any other potential judgments, liens, or wage garnishments. However, the firm's email review later flagged a collection notice Wilks had received for $2,328. When asked about this, Wilks claimed he had paid the debt before the meeting. When the firm requested documentation, Wilks submitted a receipt showing the debt was paid, but he had altered the receipt to show an earlier payment date than the actual payment date on the original receipt.

The falsification of the receipt demonstrates consciousness of guilt and willingness to deceive the firm to avoid consequences. This dishonesty, combined with the repeated failures to disclose judgments, paints a picture of someone who lacks the integrity required to work in the securities industry. For investors, this case highlights the importance of checking BrokerCheck for disclosure information including judgments, which may indicate financial problems that could create incentives for misconduct. Financial professionals facing significant financial pressures may be tempted to engage in unsuitable sales practices, unauthorized trading, or even theft to address their own financial needs. The fact that Wilks not only failed to disclose judgments but also falsified documents during an investigation raises serious questions about trustworthiness. Investors should avoid doing business with individuals who have histories of disclosure failures or document falsification.

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According to FINRA, John David Sullivan was named a respondent in a FINRA complaint alleging that he failed to provide documents and information requested by FINRA during an investigation into allegations that he engaged in a check kiting scheme by writing checks without sufficient funds across mult...

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According to FINRA, John David Sullivan was named a respondent in a FINRA complaint alleging that he failed to provide documents and information requested by FINRA during an investigation into allegations that he engaged in a check kiting scheme by writing checks without sufficient funds across multiple personal accounts and a business account. The complaint alleges that FINRA requested Sullivan's personal and business tax returns for two years, but he produced incomplete personal returns and did not produce any business returns.

Check kiting is a form of fraud involving writing checks from accounts with insufficient funds and depositing them in other accounts, temporarily taking advantage of the float time between when checks are deposited and when they clear. This scheme artificially inflates account balances and can cause losses to banks. When FINRA investigates potential check kiting by registered persons, it raises concerns about financial stability, honesty, and fitness to work in the securities industry. Individuals engaged in check kiting schemes may also be misappropriating customer funds or engaging in other misconduct.

Subsequently, when FINRA requested that Sullivan appear for on-the-record testimony, his counsel stated that Sullivan would not be able to appear due to an asserted personal medical condition. However, Sullivan did not provide any information about his medical condition to substantiate this claim. Sullivan's failure to provide documents responsive to FINRA's requests significantly impeded the investigation and deprived FINRA of material information regarding his alleged check kiting scheme and his asserted medical condition.

The complaint represents allegations that have not yet been proven. However, if the allegations are established, Sullivan's refusal to cooperate with the investigation would warrant significant sanctions. Registered persons have an obligation to respond to FINRA requests for information and documents, and assertions of medical inability to testify typically must be substantiated with medical documentation. Without such documentation, claims of medical inability can appear to be pretextual excuses to avoid testimony. For investors, this case illustrates several important points. First, check kiting allegations against financial professionals raise serious concerns about honesty and financial stability. Second, refusal to cooperate with FINRA investigations typically results in bars from the industry, as cooperation is a fundamental obligation. Third, investors should check BrokerCheck regularly to see if complaints or regulatory actions have been filed against their financial professionals. While Sullivan is entitled to defend against these allegations, investors may wish to consider the risks of maintaining relationships with individuals facing such serious charges.

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According to FINRA, Beliveau Bays was named a respondent in a FINRA complaint alleging that he forged customers' electronic signatures on account applications and an account transfer form without the customers' knowledge or permission, and that he provided false, incomplete, and misleading responses...

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According to FINRA, Beliveau Bays was named a respondent in a FINRA complaint alleging that he forged customers' electronic signatures on account applications and an account transfer form without the customers' knowledge or permission, and that he provided false, incomplete, and misleading responses to FINRA requests for information, documents, and testimony. FINRA opened an investigation into allegations in Bays' Form U5 and customer complaints.

The initial Form U5 stated that Bays' employment was terminated after he provided misrepresentations to his firm in response to inquiries surrounding his submission of key person life insurance applications for non-licensed assistants. Customer complaints in the amended Form U5 alleged that Bays forged customers' signatures on account applications. When FINRA asked in writing whether he was aware of life insurance policies being sold to two associated persons and whether he earned commissions, Bays responded that he was not aware of the policies or any commissions. This response was false and misleading because at the time of his response, Bays had earned over $720 in commissions from an active life insurance policy for one associated person and over $561 from an active policy for another.

The complaint also alleges that Bays gave false and misleading statements to insurance companies, FINRA, and his firm, including false information on insurance applications, in a Professional Profile form, in an email, and in responses to FINRA requests. Bays falsely stated that one associated person did not have accounts under his management at the firm. Additionally, the complaint alleges that Bays caused his firm to maintain inaccurate books and records by forging customer signatures and by overstating customers' annual income and net worth on new account applications.

The allegations against Bays, if proven, would represent a pattern of dishonesty including forgery, false statements, and falsification of records. Forging customer signatures is a serious violation that can facilitate unauthorized account openings, unauthorized transactions, or other misconduct. Overstating customers' income and net worth on account applications can make unsuitable investments appear suitable by creating false impressions of customers' financial capacity to bear risk. The alleged false statements to FINRA are particularly serious because they obstruct regulatory investigations.

For investors, this case highlights the importance of carefully reviewing all account documentation to ensure accuracy and to verify that signatures are authentic. Investors should never allow financial professionals to sign documents on their behalf, as this creates opportunities for abuse. The allegations about overstating income and net worth on account applications are concerning because this practice can be used to justify recommending investments that are actually unsuitable. Investors should ensure that account applications accurately reflect their financial situations and should question any discrepancies. While these are allegations that have not yet been proven, the nature of the charges suggests serious integrity concerns, and investors may wish to check BrokerCheck for updates on this case and to verify the status of any financial professionals with whom they work.

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According to FINRA, Stewart Ginn was named a respondent in a FINRA complaint alleging that he churned and excessively traded customer accounts. The complaint alleges that none of the customers was an aggressive investor, and included a customer in her late 80s suffering from a cognitive disability, ...

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According to FINRA, Stewart Ginn was named a respondent in a FINRA complaint alleging that he churned and excessively traded customer accounts. The complaint alleges that none of the customers was an aggressive investor, and included a customer in her late 80s suffering from a cognitive disability, a retired customer in her late 70s, and a retired customer between 69 and 71 years old. Ginn allegedly engaged in frequent in-and-out trades in the customer accounts while charging high commissions on both buys and sells.

Ginn's trading allegedly caused customers to incur realized losses of more than $2.22 million while generating more than $2.24 million in commissions for him and his member firm. The complaint alleges that Ginn routinely recommended that customers buy large equity positions, which he often quickly sold even when stock prices had changed only minimally. Because of the high commissions Ginn charged—generally three percent on buy transactions and two percent on sell transactions—customers routinely incurred losses on such trades. Acting with scienter and with de facto control over customer accounts, Ginn allegedly churned these accounts in willful violation of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.

The complaint also alleges that by excessively trading the accounts of retail customers, Ginn willfully violated the Best Interest Obligation under Regulation Best Interest. Additionally, the complaint alleges that Ginn recommended a series of transactions to one customer that was excessive and quantitatively unsuitable in light of the customer's investment profile. The complaint further alleges that in a majority of customer accounts, Ginn improperly traded on discretion and frequently engaged in buying and selling securities without obtaining customer authorization for each transaction.

Disregarding the cumulative impact of his excessive, high-cost trading, Ginn allegedly persisted in placing frequent trades in each of the customers' accounts even as each account incurred substantial realized losses. Ginn's trading allegedly resulted in annualized cost-to-equity ratios of between 14 percent to 27 percent in customers' accounts, making it unlikely they would realize a profit. Churning is one of the most serious violations in the securities industry because it involves brokers enriching themselves through commissions at the direct expense of customers.

The fact that alleged victims included an elderly woman with cognitive disability makes the allegations particularly egregious, as vulnerable seniors are often targets of financial exploitation. For investors, particularly seniors and retirees, this case highlights the importance of monitoring account activity carefully for signs of churning including frequent trading, in-and-out trading of the same securities, high commission costs relative to account value, and declining account values despite market conditions. Investors should review account statements carefully, calculate total commission costs, and question any trading patterns that seem excessive. High commission rates like the three percent and two percent allegedly charged by Ginn on buys and sells can make it virtually impossible to profit, as securities would need to appreciate substantially just to break even after commissions. While these are allegations that have not yet been proven, investors can protect themselves by checking BrokerCheck for complaints and regulatory actions, monitoring account activity carefully, and reporting concerns promptly to firm compliance and regulators.

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According to FINRA, Jose Luis Centeno was named a respondent in a FINRA complaint alleging that he falsified member firm records to show that he had reviewed exception reports assigned to him in his capacity as a compliance officer when, in fact, he had not reviewed these exception reports. The comp...

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According to FINRA, Jose Luis Centeno was named a respondent in a FINRA complaint alleging that he falsified member firm records to show that he had reviewed exception reports assigned to him in his capacity as a compliance officer when, in fact, he had not reviewed these exception reports. The complaint alleges that Centeno falsified the record of his review of assorted exception reports stored in the firm's system by opening the reports, typing "Reviewed" into the notes fields, and clicking the button labeled "Reviewed," without having actually conducted a review of any of the reports.

Centeno also allegedly falsified the record of his review of Low Volume reports in the firm's daily compliance checklist by typing his initials into the checklist to falsely signify that he had reviewed the reports. The complaint alleges that Centeno falsified the records of his reviews to give his firm the false impression he was performing his job responsibilities.

Exception reports are critical supervisory tools that flag potentially problematic activities for review by compliance personnel. Different types of exception reports can identify activities such as excessive trading, unsuitable transactions, unauthorized trading, potential money laundering, or other red flags requiring investigation. When compliance officers falsely attest to reviewing exception reports without actually conducting reviews, it defeats the purpose of the supervisory system and can allow harmful conduct to continue undetected.

Centeno's alleged conduct is particularly serious because he held a compliance officer position with responsibility for protecting customers and ensuring regulatory compliance. His alleged failures to conduct required reviews while falsifying records suggesting he had done so represents a fundamental breach of his duties. If compliance officers cannot be trusted to perform their supervisory responsibilities honestly, the entire supervisory framework breaks down. Firms and customers rely on compliance officers to serve as gatekeepers preventing misconduct, and when those gatekeepers falsify their work, serious harm can result.

For investors, this case highlights the importance of firms' compliance systems in protecting customers. While investors typically have no visibility into whether compliance reviews are being conducted properly, they benefit from robust compliance oversight that identifies and stops problematic activities. When compliance officers fail to perform their duties, or worse, falsify records to hide their failures, it can allow brokers to engage in harmful practices without detection. Investors should understand that reputable firms maintain comprehensive compliance programs with multiple layers of review, and should consider the strength of a firm's compliance culture when deciding where to maintain accounts. While these are allegations that have not yet been proven, they raise serious questions about Centeno's fitness for a compliance role and suggest systemic concerns at his firm.

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According to FINRA, James Brett Stuart was named a respondent in a FINRA complaint alleging that he failed to establish, maintain, and enforce a supervisory system, including written supervisory procedures, that was reasonably designed to achieve compliance with the Care Obligation of Regulation Bes...

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According to FINRA, James Brett Stuart was named a respondent in a FINRA complaint alleging that he failed to establish, maintain, and enforce a supervisory system, including written supervisory procedures, that was reasonably designed to achieve compliance with the Care Obligation of Regulation Best Interest and FINRA Rule 2111 as they pertain to excessive trading. Stuart was allegedly responsible for establishing and maintaining his member firm's written supervisory procedures, which did not describe how the firm should identify or respond to red flags of possible excessive trading and did not address Reg BI at all following its effective date.

The complaint also alleges that Stuart failed to reasonably supervise trading in customer accounts. Stuart allegedly did not review alerts received by his firm showing that accounts had been charged high commissions equaling at least 30 percent of their value, and he did not otherwise take any steps to determine whether frequent and high-cost trades in the accounts were consistent with customers' investment profiles. Stuart allegedly failed to identify or respond reasonably to red flags of possible excessive trading in customers' accounts. In fact, the trading recommended in the accounts allegedly resulted in cost-to-equity ratios of approximately 30 percent and total costs of approximately $236,500 for one account and $22,000 for another.

Cost-to-equity ratios of 30 percent mean that accounts would need to generate returns of 30 percent just to break even after costs—a threshold that is extremely difficult to achieve and that makes profitable investing nearly impossible for customers. The complaint also alleges that Stuart failed to appear for on-the-record testimony that FINRA requested as part of its investigation into his supervision of a registered representative. Stuart initially appeared for testimony but requested an adjournment before the testimony was complete. FINRA agreed to adjourn and issued subsequent requests for Stuart to appear again to complete his testimony, but Stuart allegedly failed to appear to complete his testimony.

Stuart's alleged failures as a supervisor are particularly serious given his role in establishing and maintaining his firm's written supervisory procedures. Principals who fail to create adequate procedures or to supervise effectively can enable widespread harm to customers. The failure to address Regulation Best Interest in the firm's procedures following its June 2020 effective date is especially troubling, as Reg BI established important new obligations regarding broker-dealers' duty to act in customers' best interests. The alleged failure to respond to alerts showing commissions of 30 percent of account value represents an egregious supervisory breakdown.

For investors, this case illustrates the critical role of firm supervision in protecting customers from excessive trading and other harmful practices. When supervisors fail to perform their duties, individual brokers may engage in churning and other abusive practices without detection. Investors should understand that firms have obligations to supervise their representatives' activities, and supervisory failures that enable customer harm can result in firm liability. While these are allegations that have not yet been proven, they suggest systemic compliance failures that should concern any investor. The additional allegation that Stuart failed to complete his FINRA testimony raises further questions about his willingness to be accountable for his supervisory failures.

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