Bad Brokers

According to FINRA, Saraie Dorgilles was barred from association with any FINRA member firm in all capacities after refusing to appear for on-the-record testimony requested by FINRA.

FINRA sought Dorgilles' testimony in connection with its investigation into her conduct while taking the Securitie...

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According to FINRA, Saraie Dorgilles was barred from association with any FINRA member firm in all capacities after refusing to appear for on-the-record testimony requested by FINRA.

FINRA sought Dorgilles' testimony in connection with its investigation into her conduct while taking the Securities Industry Essentials (SIE) exam. The SIE exam is an entry-level exam that assesses basic knowledge of the securities industry and is required for individuals seeking to become registered representatives.

By refusing to cooperate with FINRA's investigation, Dorgilles prevented regulators from fully investigating the matter. FINRA takes exam integrity seriously, as the qualification exams are designed to ensure that individuals working in the securities industry have demonstrated the knowledge necessary to serve investors.

FINRA Rule 8210 requires associated persons to cooperate with FINRA investigations, including appearing for testimony when requested. Refusal to cooperate results in serious consequences including being barred from the securities industry.

The bar from the securities industry means that Dorgilles can no longer work in any capacity for any FINRA member firm. This case demonstrates FINRA's commitment to maintaining the integrity of its qualification examination program.

Investors benefit from knowing that individuals in the securities industry must pass qualification exams and that FINRA actively investigates potential exam misconduct.

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According to FINRA, James Clayton Langford III was barred from association with any FINRA member firm in all capacities after refusing to appear for on-the-record testimony requested by FINRA.

FINRA sought Langford's testimony in connection with its investigation of allegations made by his member...

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According to FINRA, James Clayton Langford III was barred from association with any FINRA member firm in all capacities after refusing to appear for on-the-record testimony requested by FINRA.

FINRA sought Langford's testimony in connection with its investigation of allegations made by his member firm that he converted funds from a senior customer. The firm filed Form U5 amendments disclosing that Langford allegedly converted $600,000 from a trust account for his own personal use without the consent or knowledge of the customer.

The firm subsequently filed another Form U5 amendment disclosing felony charges against Langford for aggravated theft by deception and financial exploitation of the elderly.

By refusing to cooperate with FINRA's investigation, Langford prevented regulators from fully investigating these serious allegations. Conversion of customer funds is one of the most serious violations in the securities industry, and exploitation of senior investors is a particular concern for regulators.

The bar from the securities industry means that Langford can no longer work in any capacity for any FINRA member firm. Investors, particularly seniors and their families, should remain vigilant about their accounts and report any suspicious activity to the firm and regulators.

This case highlights the importance of investors regularly reviewing their account statements and questioning any unexpected changes or withdrawals. FINRA's BrokerCheck service allows investors to research the background of their financial professionals.

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According to FINRA, Daniel Hoeflinger was barred from associating with any FINRA member firm in any capacity after failing to provide information and documents requested by FINRA in connection with its investigation.

FINRA was investigating integrity concerns that Hoeflinger's member firm express...

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According to FINRA, Daniel Hoeflinger was barred from associating with any FINRA member firm in any capacity after failing to provide information and documents requested by FINRA in connection with its investigation.

FINRA was investigating integrity concerns that Hoeflinger's member firm expressed on his Form U5. The investigation focused on whether Hoeflinger had submitted false information or documents to his firm in connection with a paid leave of absence.

Hoeflinger's failure to provide the requested information and documents prevented FINRA from fully investigating the matter. The information and documents FINRA requested were integral to the investigation.

FINRA Rule 8210 requires associated persons to provide information and documents when requested in connection with investigations. This cooperation requirement is essential to FINRA's ability to investigate potential misconduct and protect investors.

The bar from the securities industry is a serious sanction that prevents Hoeflinger from working in any capacity for any FINRA member firm. When individuals fail to cooperate with investigations, it raises questions about what they may be trying to conceal.

Investors can use FINRA's BrokerCheck service to research the background and disciplinary history of their financial professionals. Checking BrokerCheck regularly can help investors identify any regulatory actions taken against individuals who handle their investments.

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According to FINRA, Howard Dennis Kavinsky was barred from association with any FINRA member firm in all capacities for falsifying at least 190 consolidated account statements for at least eight customers, some of whom were seniors, and providing false information and testimony to FINRA.

Kavinsky...

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According to FINRA, Howard Dennis Kavinsky was barred from association with any FINRA member firm in all capacities for falsifying at least 190 consolidated account statements for at least eight customers, some of whom were seniors, and providing false information and testimony to FINRA.

Kavinsky overstated customers' account balances and reflected fictitious investments in a hedge fund on consolidated account statements. For at least six customers, Kavinsky falsified statements to show he had invested a portion of their funds in a hedge fund when no such investments had been made.

When FINRA investigated, Kavinsky provided false and misleading information and testified falsely during on-the-record testimony. FINRA requested that Kavinsky identify all customers for whom he had misrepresented account values, but he responded falsely by naming only a married couple who had already complained about him. At the time, Kavinsky knew he had overstated account values for at least eight customers.

During his testimony, Kavinsky repeatedly testified falsely that he never told any customers they were invested in hedge funds.

Falsifying account statements is an extremely serious violation that can cause significant harm to investors who rely on these documents to understand their financial situation. Seniors are particularly vulnerable to this type of misconduct.

This case underscores the importance of investors independently verifying their account holdings and being skeptical of any documents that do not come directly from their brokerage firm. Investors should also compare any documents provided by their advisor with official statements from the custodian.

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According to FINRA, Adam Harris Ezrilov was barred from association with any FINRA member firm in all capacities after failing to appear for on-the-record testimony requested by FINRA.

FINRA sought Ezrilov's testimony in connection with its investigation into the circumstances surrounding a Form ...

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According to FINRA, Adam Harris Ezrilov was barred from association with any FINRA member firm in all capacities after failing to appear for on-the-record testimony requested by FINRA.

FINRA sought Ezrilov's testimony in connection with its investigation into the circumstances surrounding a Form U5 submitted by his member firm. The firm alleged that it discharged Ezrilov for submitting succession plan documents containing a non-genuine signature.

By refusing to cooperate with FINRA's investigation, Ezrilov prevented regulators from fully investigating these serious allegations. Document falsification is a serious violation that undermines the integrity of the securities industry.

FINRA Rule 8210 requires associated persons to cooperate with FINRA investigations, including appearing for testimony when requested. This cooperation requirement is fundamental to FINRA's investor protection mission.

The bar from the securities industry means that Ezrilov can no longer work in any capacity for any FINRA member firm. Investors can check the registration status and disciplinary history of their financial professionals through FINRA's BrokerCheck service.

This case demonstrates the serious consequences that follow when individuals refuse to cooperate with regulatory investigations. When people refuse to provide testimony about allegations of document falsification, it prevents regulators from determining what actually occurred and protecting investors from potential misconduct.

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According to FINRA, Michael Timothy Shoniker was assessed a deferred fine of $7,500 and suspended from association with any FINRA member firm in all capacities for six months for failing to timely and fully disclose his outside business activities (OBAs) to his member firm.

Shoniker formed a comp...

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According to FINRA, Michael Timothy Shoniker was assessed a deferred fine of $7,500 and suspended from association with any FINRA member firm in all capacities for six months for failing to timely and fully disclose his outside business activities (OBAs) to his member firm.

Shoniker formed a company to invest in real estate but did not disclose it to his firm for four months. Shortly after disclosing the real estate business, Shoniker began using the company to provide consulting and marketing services to a third-party investment advisor. He also began referring customers of his firm to the advisor for compensation.

In exchange for Shoniker's referrals and consulting and marketing services, the advisor paid Shoniker approximately $740,000 through his company. This compensation represented half of the investment advisory fees, less expenses, that the advisor received from over 96 customers of Shoniker's firm.

Although Shoniker submitted OBA forms to his firm, he described his company only as a real estate business without disclosing the referral, consulting, or marketing services he provided. Shoniker also submitted annual compliance questionnaires falsely stating that he provided no financial consulting services to third parties and had completely disclosed his OBAs.

FINRA rules require registered representatives to disclose outside business activities so firms can evaluate potential conflicts of interest and ensure customers are protected. When representatives receive undisclosed compensation for referring customers to outside advisors, it creates conflicts that may not be in customers' best interests.

The suspension is in effect from December 2, 2024, through June 1, 2025.

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According to FINRA, Matthew Thomas Higgins was fined $5,000 and suspended from association with any FINRA member firm in all capacities for three months for participating in private securities transactions without providing prior written notice to his member firm.

Higgins solicited two investors ...

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According to FINRA, Matthew Thomas Higgins was fined $5,000 and suspended from association with any FINRA member firm in all capacities for three months for participating in private securities transactions without providing prior written notice to his member firm.

Higgins solicited two investors to invest a total of $150,000 in partnership interests issued by a crypto asset investment fund he co-founded. He also solicited one of those investors and an additional investor to invest $200,000 in promissory notes issued by a crypto asset mining company he co-founded.

Higgins introduced the investment opportunities to investors, answered their questions, sent offering documents, and facilitated the transactions. None of the investors were customers of Higgins' firm, and Higgins did not receive any commissions for soliciting these transactions.

FINRA Rule 3280 requires registered representatives to provide prior written notice to their firms before participating in private securities transactions. This requirement allows firms to evaluate the transactions for potential risks and conflicts, and to determine whether additional supervision is needed.

Private securities transactions that occur outside of a firm's supervision present risks to investors because they may not receive the same protections as transactions conducted through the firm. Even when representatives do not receive compensation, firms need to know about these activities.

The suspension is in effect from January 6, 2025, through April 5, 2025. Investors should be cautious about investment opportunities presented outside of normal brokerage channels.

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According to FINRA, Chris S. Stocks was fined $10,000 and suspended from association with any FINRA member firm in all capacities for 30 days for engaging in an outside business activity without providing prior written notice to his member firm.

Stocks formed business entities for the purpose of ...

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According to FINRA, Chris S. Stocks was fined $10,000 and suspended from association with any FINRA member firm in all capacities for 30 days for engaging in an outside business activity without providing prior written notice to his member firm.

Stocks formed business entities for the purpose of purchasing and operating a hotel. After the hotel was purchased, Stocks remained involved with operations, including making hiring decisions, interacting with the hotel's general manager, and participating in contract negotiations. Stocks expected to receive compensation by sharing in the hotel's profits.

Stocks failed to provide written notice to his firm for more than three years. During this time, he completed annual compliance attestations in which he falsely stated that he had disclosed all of his outside business activities.

FINRA rules require registered representatives to provide prior written notice of outside business activities so firms can evaluate potential conflicts of interest, time commitments, and reputational risks. Operating a hotel business while serving as a registered representative could create various conflicts and demands on time that firms need to assess.

By falsely certifying on compliance questionnaires that all outside business activities had been disclosed, Stocks compounded his initial failure to provide notice.

The suspension was in effect from January 6, 2025, through February 4, 2025. This case demonstrates the importance of full disclosure of outside business activities and the consequences of making false compliance attestations.

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According to FINRA, Christopher Mullaly was assessed a deferred fine of $5,000 and suspended from association with any FINRA member firm in all capacities for three months for failing to obtain required consent for outside brokerage accounts.

Mullaly maintained two outside brokerage accounts in w...

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According to FINRA, Christopher Mullaly was assessed a deferred fine of $5,000 and suspended from association with any FINRA member firm in all capacities for three months for failing to obtain required consent for outside brokerage accounts.

Mullaly maintained two outside brokerage accounts in which he could effect securities transactions and in which he had a beneficial interest. He did not seek or obtain written consent from his member firm before opening these accounts or while continuing to maintain them.

Additionally, Mullaly did not notify one of the financial institutions where he maintained an account of his association with his firm, and did not timely notify the other institution. He also submitted annual compliance questionnaires falsely certifying that he had no outside brokerage accounts.

FINRA rules require registered representatives to obtain firm approval before opening outside brokerage accounts and to notify the other financial institution of their association with a FINRA member firm. These requirements allow firms to monitor for potential conflicts of interest, trading on material non-public information, and other compliance concerns.

By maintaining undisclosed accounts and making false certifications, Mullaly circumvented his firm's ability to supervise his personal trading activities.

The suspension is in effect from December 16, 2024, through March 15, 2025. Investors should know that their financial advisors are subject to rules requiring disclosure and supervision of their personal trading activities.

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According to FINRA, Michael John Brewster was fined $5,000 and suspended from association with any FINRA member firm in all capacities for one month for instructing his sales assistant to complete firm-required compliance training on his behalf.

Brewster instructed his sales assistant to use his ...

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According to FINRA, Michael John Brewster was fined $5,000 and suspended from association with any FINRA member firm in all capacities for one month for instructing his sales assistant to complete firm-required compliance training on his behalf.

Brewster instructed his sales assistant to use his firm login credentials to complete 15 firm-required online compliance training modules, totaling over five hours of training.

Compliance training requirements exist to ensure that registered representatives maintain current knowledge of regulatory requirements, firm policies, and industry best practices. When representatives have others complete their training, it undermines the purpose of these requirements and may leave representatives unprepared to serve their clients in compliance with applicable rules.

This type of misconduct, while it may seem minor, reflects a willingness to circumvent compliance requirements and to be dishonest about professional obligations. Firms rely on training programs to ensure their representatives understand their responsibilities to clients.

The suspension was in effect from January 6, 2025, through February 5, 2025.

Investors should know that their financial advisors are required to complete ongoing compliance training. When advisors cut corners on these requirements, it may indicate a broader disregard for the rules designed to protect investors.

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