Bad Brokers

According to FINRA, Richard Martel Funderburk was barred from association with any FINRA member in all capacities for providing false information about his examination results.

After failing the Securities Industry Essentials (SIE) exam, Funderburk sent an instant message to his supervisor falsel...

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According to FINRA, Richard Martel Funderburk was barred from association with any FINRA member in all capacities for providing false information about his examination results.

After failing the Securities Industry Essentials (SIE) exam, Funderburk sent an instant message to his supervisor falsely informing her that he had passed the exam. He then provided her with a fabricated SIE exam score report reflecting a passing score when he had actually failed. This represents a deliberate attempt to deceive his employer about meeting basic qualification requirements for the securities industry.

The SIE exam tests fundamental knowledge of the securities industry, including products, markets, regulatory agencies, and prohibited practices. It is a prerequisite for individuals seeking to become registered representatives. Attempting to deceive an employer about passing this exam demonstrates both dishonesty and a willingness to work in a regulated capacity without meeting minimum qualification standards.

Funderburk's conduct is particularly concerning because it involves the fabrication of official documents. Creating a fake exam score report requires deliberate effort and planning, and sending it to a supervisor as if it were genuine demonstrates a calculated attempt at fraud. Such conduct strikes at the heart of the qualification and registration system designed to ensure that only qualified individuals serve investors.

The permanent bar from the securities industry is appropriate given the dishonest nature of Funderburk's conduct. The securities industry depends on trust, and individuals who fabricate documents and lie to supervisors about basic qualifications cannot be trusted to act honestly with investors. For investors, this case reinforces the importance of working with properly registered representatives. FINRA's BrokerCheck allows investors to verify that financial professionals have passed required examinations and hold appropriate registrations. A bar means Funderburk cannot work for any FINRA member firm unless he petitions for re-entry after at least two years, though reinstatement after such dishonest conduct would be unlikely.

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According to FINRA, Kimberly A. Sittarich was barred from association with any FINRA member in all capacities for refusing to cooperate with a regulatory investigation.

FINRA's investigation concerned the circumstances giving rise to Sittarich's termination from her member firm. When individuals ...

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According to FINRA, Kimberly A. Sittarich was barred from association with any FINRA member in all capacities for refusing to cooperate with a regulatory investigation.

FINRA's investigation concerned the circumstances giving rise to Sittarich's termination from her member firm. When individuals are terminated from securities industry employment, FINRA typically investigates to determine whether misconduct occurred, whether customers were harmed, and whether regulatory violations took place. Sittarich refused to provide documents and information or appear for on-the-record testimony requested in connection with this investigation.

The refusal to cooperate is particularly significant because it prevented regulators from determining what led to Sittarich's termination and whether any customers were affected. When individuals refuse to participate in investigations of their own terminations, it naturally raises questions about what information they are seeking to withhold and suggests potential consciousness of wrongdoing.

Registered representatives have an absolute obligation to cooperate with FINRA investigations. This requirement exists because FINRA cannot effectively protect investors without access to information from individuals involved in potential misconduct. On-the-record testimony is especially important because it allows regulators to ask follow-up questions and probe for details that documents alone may not reveal.

The permanent bar from the securities industry reflects the seriousness of Sittarich's refusal to cooperate. While the underlying reasons for her termination were not established through this proceeding due to her refusal to participate, the refusal itself warrants the most severe sanction available. A bar means Sittarich cannot work in any capacity for any FINRA member firm unless she petitions for re-entry after at least two years and demonstrates fitness to return to the industry.

For investors, this case highlights the importance of regulatory cooperation requirements. When financial professionals refuse to answer questions about their conduct, it undermines investor protection. Investors can research the backgrounds of financial professionals through FINRA's BrokerCheck, which provides information about terminations, customer complaints, and disciplinary actions.

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According to FINRA, Randall George Skrabonja was barred from association with any FINRA member in all capacities for refusing to provide documents and information requested during a regulatory investigation.

The investigation concerned the circumstances surrounding Skrabonja's termination from hi...

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According to FINRA, Randall George Skrabonja was barred from association with any FINRA member in all capacities for refusing to provide documents and information requested during a regulatory investigation.

The investigation concerned the circumstances surrounding Skrabonja's termination from his member firm. The firm had filed a Form U5 stating that it discharged Skrabonja for "selling away" without firm approval. Selling away occurs when registered representatives sell securities or investments that are not approved or offered by their member firm, depriving the firm of the opportunity to conduct due diligence and supervise the transactions.

Selling away is a serious violation because it exposes investors to investments that have not been vetted by the representative's firm and may involve unsuitable, high-risk, or fraudulent products. Representatives often engage in selling away to earn higher commissions than available on firm-approved products, creating a conflict of interest that puts representatives' financial interests ahead of investors' best interests.

When FINRA sought to investigate the selling away allegations, Skrabonja refused to provide the requested documents and information. This refusal prevented regulators from determining the nature and scope of the selling away activity, what investments were involved, how many customers were affected, and whether customers suffered losses.

The permanent bar from the securities industry reflects both the seriousness of the underlying selling away allegation and Skrabonja's refusal to cooperate with the investigation. His refusal to provide information raises serious questions about what he sought to conceal and suggests consciousness of significant wrongdoing. A bar means Skrabonja cannot work in any capacity for any FINRA member firm unless he petitions for re-entry after at least two years, though reinstatement would be difficult.

For investors, this case reinforces the danger of investments offered outside of a brokerage firm's normal business. Investors should be skeptical when representatives suggest "special opportunities" not available through the firm. Before investing, check whether the investment is offered through the representative's firm and conduct independent research. FINRA's BrokerCheck provides information about representatives' disciplinary history and customer complaints.

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According to FINRA, Jonathan Walter Way was barred from association with any FINRA member in all capacities for refusing to provide documents and information requested during a regulatory investigation.

The investigation originated from a Form U5 filed by Way's member firm stating that he was per...

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According to FINRA, Jonathan Walter Way was barred from association with any FINRA member in all capacities for refusing to provide documents and information requested during a regulatory investigation.

The investigation originated from a Form U5 filed by Way's member firm stating that he was permitted to resign while under internal review for potential sales practice violations. Sales practice violations encompass a wide range of potential misconduct, including unsuitable recommendations, misrepresentations or omissions of material facts, excessive trading, unauthorized transactions, or failure to follow firm policies regarding customer accounts.

When firms permit employees to resign while under investigation, it often indicates that the investigation raised serious concerns but the firm chose to allow resignation rather than proceeding to termination. However, resignation does not end regulatory scrutiny—FINRA continues to investigate potential violations regardless of employment status.

Way initially responded to FINRA's requests but ultimately refused to produce the information and documents requested. This refusal prevented regulators from determining what sales practice violations the firm was investigating, whether customers were harmed, and whether regulatory violations occurred. His initial cooperation followed by refusal suggests he may have recognized the seriousness of the issues being investigated.

The permanent bar from the securities industry reflects the seriousness of Way's refusal to cooperate. Registered persons have an absolute obligation to respond to FINRA information requests, and refusal to cooperate obstructs investor protection. While the underlying sales practice issues were not proven through this action due to Way's refusal to participate, the refusal itself warrants the most severe sanction available.

For investors, this case demonstrates that resignation from a firm does not shield financial professionals from regulatory accountability. It also highlights the importance of checking FINRA's BrokerCheck before opening accounts with financial professionals. BrokerCheck provides information about terminations, disclosures of investigations, customer complaints, and disciplinary actions. A bar means Way cannot work for any FINRA member firm unless he petitions for re-entry after at least two years.

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According to FINRA, Delaina Sue Kucish was assessed a deferred fine of $15,000 and suspended from association with any FINRA member in all capacities for 15 months for multiple violations involving unauthorized communications and false statements.

Kucish caused her member firm to fail to preserve...

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According to FINRA, Delaina Sue Kucish was assessed a deferred fine of $15,000 and suspended from association with any FINRA member in all capacities for 15 months for multiple violations involving unauthorized communications and false statements.

Kucish caused her member firm to fail to preserve required books and records by using unauthorized text messages on her personal cell phone to transmit client documents to another associated person at the firm on multiple occasions. Firms are required to maintain records of business-related communications, and representatives must use firm-approved communication methods so that these records can be properly preserved. By using personal text messages, Kucish created communications that the firm could not capture or supervise.

The violations became more serious when Kucish provided false information during investigations. She told a firm investigator that she did not send any client information or documents via text message, which was false. She then compounded this false statement by submitting a written response to FINRA containing false or misleading information, including a false denial that she ever sent client documents via text message to another associated person. Only after submitting this false response did Kucish subsequently admit in another written response to FINRA that she had, in fact, sent documents via text message.

This pattern of conduct—using unauthorized communications, lying to the firm, and initially lying to FINRA before eventually admitting the truth—demonstrates a concerning lack of candor and willingness to mislead both her employer and regulators. The progression from initial denial to eventual admission suggests Kucish recognized the falsehood could not be maintained.

The 15-month suspension reflects the seriousness of providing false information to both the firm and FINRA. While Kucish eventually admitted the truth, her initial false denials obstructed investigations and wasted regulatory resources. For investors, this case illustrates the importance of firms maintaining comprehensive communication records and the serious consequences when representatives attempt to conduct business through unapproved channels. The suspension is in effect from June 5, 2023, through September 4, 2024.

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According to FINRA, Adam C. Ellison was assessed a deferred fine of $5,000 and suspended from association with any FINRA member in all capacities for three months for willfully failing to timely amend his Form U4 to disclose a felony charge.

While Ellison was associated with his member firm, the ...

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According to FINRA, Adam C. Ellison was assessed a deferred fine of $5,000 and suspended from association with any FINRA member in all capacities for three months for willfully failing to timely amend his Form U4 to disclose a felony charge.

While Ellison was associated with his member firm, the District Attorney of Nevada County, California filed a felony complaint against him with the California Superior Court. Ellison became aware of the felony charge the following month and was required to amend his Form U4 within 30 days to disclose the charge. However, Ellison did not disclose the felony charge on his Form U4 until approximately four months later—significantly beyond the 30-day deadline.

Form U4 is the uniform registration form used by securities industry personnel, and it must be kept current with accurate information about criminal charges, customer complaints, regulatory actions, and other disclosure events. This requirement exists so that firms can assess whether individuals remain eligible for registration and so that investors can access accurate information about the background of financial professionals through FINRA's BrokerCheck system.

The term "willfully" in this context means that Ellison knew he was required to disclose the felony charge but voluntarily chose not to do so within the required timeframe. This is more serious than a negligent oversight—it indicates a knowing failure to meet disclosure obligations.

The three-month suspension reflects the seriousness of failing to disclose criminal charges. Investors have a right to know about felony charges filed against their financial advisors, and firms need this information to evaluate whether representatives remain fit for employment. Ellison's four-month delay prevented both investors and his firm from having access to material information about his background.

For investors, this case underscores the importance of regularly checking FINRA's BrokerCheck to review the background of financial professionals. Disclosure requirements exist for investor protection, and failures to disclose raise questions about what other information an individual might be willing to conceal. The suspension was in effect from June 5, 2023, through September 4, 2023.

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According to FINRA, Jeremy Jefferson Jacobson was assessed a deferred fine of $5,000, suspended from association with any FINRA member in all capacities for three months, and ordered to pay deferred disgorgement of $7,887 in commissions, plus interest.

Jacobson executed trades with a total princi...

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According to FINRA, Jeremy Jefferson Jacobson was assessed a deferred fine of $5,000, suspended from association with any FINRA member in all capacities for three months, and ordered to pay deferred disgorgement of $7,887 in commissions, plus interest.

Jacobson executed trades with a total principal value of approximately $1.1 million in his customers' non-discretionary brokerage accounts without the customers' authorization or consent for the trades. In non-discretionary accounts, representatives must obtain customer authorization before executing each trade. By trading without authorization, Jacobson violated customers' control over their own investments and exposed them to market risk without their knowledge or approval.

Jacobson received $7,887 in total commissions from these unauthorized trades, which he is now required to disgorge. Disgorgement requires the return of ill-gotten gains and is designed to ensure that violators do not profit from their misconduct. In this case, the commission disgorgement acknowledges that Jacobson should not benefit financially from transactions that customers did not authorize.

Unauthorized trading is a serious violation because it fundamentally breaches the trust relationship between representatives and customers. Customers have the right to make their own investment decisions in non-discretionary accounts, and representatives who trade without authorization usurp this right and potentially expose customers to losses or tax consequences they did not approve.

The three-month suspension and commission disgorgement reflect the seriousness of unauthorized trading. While the settlement does not indicate whether customers suffered losses from the unauthorized trades, the violation itself is serious regardless of outcome because it deprives customers of control over their own accounts.

For investors, this case highlights the importance of carefully reviewing account statements and confirmations to identify any unauthorized transactions. Investors should immediately report unauthorized activity to their firm and to FINRA. Account agreements and new account documents specify whether an account is discretionary or non-discretionary, and investors should understand the difference. The suspension was in effect from June 20, 2023, through September 19, 2023.

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According to FINRA, Kale KH Young was fined $5,000 and suspended from association with any FINRA member in all capacities for 20 business days for falsifying customer signatures on firm documents.

Young falsified the signatures of three customers of his member firm on various forms, though he had...

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According to FINRA, Kale KH Young was fined $5,000 and suspended from association with any FINRA member in all capacities for 20 business days for falsifying customer signatures on firm documents.

Young falsified the signatures of three customers of his member firm on various forms, though he had the customers' permission to do so. The falsifications took different forms: Young re-used one customer's previously obtained genuine signature on account transfer forms and mutual fund replacement forms; he re-used another customer's previously obtained genuine signature on mutual fund replacement forms; and he affixed a copy of a third customer's signature to a life insurance product acknowledgement form. In each instance, the customers did not actually sign the documents but authorized Young to affix or re-use their signatures.

Young also falsely stated on an annual compliance questionnaire that he had not signed or affixed any other person's signature on a document, compounding the problem with false attestation. The firm used all but one of the falsified documents to authorize and record the sale, transfer, or disbursement of cash or securities from customers' accounts. As a result, Young caused his firm to maintain inaccurate books and records.

While Young had customer permission to affix signatures, this does not excuse the conduct. Securities regulations require actual signatures on documents for important reasons: signatures evidence informed consent at the time of transaction, create accountability, and prevent disputes about whether customers actually authorized transactions. Even with customer permission, using copied or re-used signatures on documents authorizing the movement of money or securities creates serious risks and undermines the integrity of firm records.

The 20-business-day suspension reflects that Young had customer permission, but nevertheless engaged in improper conduct that violated recordkeeping requirements. For investors, this case illustrates that proper documentation matters even when customers trust their representatives. Investors should be wary of any representative who suggests shortcuts to signature requirements, as these shortcuts may violate regulations and create future disputes. The suspension was in effect from July 3, 2023, through July 31, 2023.

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According to FINRA, Sharon Hayut was assessed a deferred fine of $10,000 and suspended from association with any FINRA member in all capacities for four months for accepting monetary gifts from a senior customer in violation of firm policies.

Hayut accepted two monetary gifts totaling $50,815 fro...

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According to FINRA, Sharon Hayut was assessed a deferred fine of $10,000 and suspended from association with any FINRA member in all capacities for four months for accepting monetary gifts from a senior customer in violation of firm policies.

Hayut accepted two monetary gifts totaling $50,815 from a senior customer who was one of her long-time clients. Both checks were issued from one of the customer's accounts at the firm and were made payable to the synagogue to which Hayut belonged. The funds from the checks were applied to Hayut's account at the synagogue and were used to pay for various expenses.

Hayut's acceptance of these gifts violated her member firm's gift policies. Firms typically impose restrictions on accepting gifts from customers to prevent conflicts of interest and protect customers, particularly vulnerable senior customers, from being exploited. Hayut was aware of the firm's gift policies but did not disclose her acceptance of the checks to the firm.

The violation became more serious when Hayut provided false information on a compliance questionnaire. After accepting the first check, she incorrectly answered "no" to a question on her annual compliance questionnaire asking whether she had received a gift from a customer valued at over $100 within the last 12 months. This false answer concealed her acceptance of a substantial gift that far exceeded the firm's limits.

The four-month suspension and $10,000 fine reflect the seriousness of accepting substantial gifts from a senior customer and then concealing this acceptance from the firm. Senior customers may be particularly vulnerable to representatives who seek personal benefits from the relationship. The substantial size of the gifts—over $50,000—and the method of directing them through the synagogue raise questions about whether the customer fully understood the personal benefit flowing to Hayut.

For investors, particularly senior investors, this case serves as a warning about financial professionals who seek personal gifts or benefits. Investors should be cautious about giving substantial gifts to financial advisors and should understand that legitimate professionals will not solicit or accept such gifts. The suspension is in effect from June 20, 2023, through October 19, 2023.

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According to FINRA, Brody Ralph Bray was assessed a deferred fine of $10,000 and suspended from association with any FINRA member in all capacities for six months for engaging in undisclosed outside business activities and distributing misleading investment-related communications.

Bray became an ...

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According to FINRA, Brody Ralph Bray was assessed a deferred fine of $10,000 and suspended from association with any FINRA member in all capacities for six months for engaging in undisclosed outside business activities and distributing misleading investment-related communications.

Bray became an independent contractor for a company that provides subscription-based investment content for a fee, earning $77,500 in compensation for services that included providing investment and trade-related analysis and communications. He also failed to provide prior written notice about activities with two additional limited liability companies he formed. Bray conducted the company-related activities under a pseudonym and falsely attested on an annual compliance questionnaire that he had not engaged in any undisclosed outside business activities.

Representatives must provide prior written notice to their firms about outside business activities so firms can evaluate potential conflicts of interest, assess whether the activities involve securities transactions, and ensure proper supervision. By concealing these activities and using a pseudonym, Bray deprived his firm of the ability to conduct this evaluation and prevented required supervision.

The violations became more serious because the investment-related content Bray provided to the company was sent to its subscribers and violated FINRA Rule 2210 content standards. The communications contained exaggerated, unwarranted, promissory, and/or misleading statements or claims. When representatives create investment content outside of firm supervision, there is no compliance review to ensure accuracy and appropriateness, increasing the risk that communications will mislead investors.

The six-month suspension reflects multiple violations: undisclosed outside business activities, false attestations on compliance questionnaires, and distribution of misleading communications to the public. The use of a pseudonym and false compliance questionnaire responses indicate Bray knew his conduct was improper and deliberately concealed it.

For investors, this case highlights the risks of investment advice provided through subscription services that may not be subject to regulatory oversight. Investors should verify whether individuals providing investment recommendations are properly registered and supervised. The suspension is in effect from June 20, 2023, through December 19, 2023.

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