Bad Brokers

According to FINRA, Bryan Scott Corona was assessed a deferred fine of $5,000 and suspended from association with any FINRA member firm in all capacities for four months for willfully failing to timely amend his Form U4 to disclose felony charges.

Corona learned of the felony charges no later tha...

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According to FINRA, Bryan Scott Corona was assessed a deferred fine of $5,000 and suspended from association with any FINRA member firm in all capacities for four months for willfully failing to timely amend his Form U4 to disclose felony charges.

Corona learned of the felony charges no later than when he entered a plea through counsel with the court. However, he failed to amend his Form U4 for over six months.

FINRA rules require registered representatives to update their Form U4 within 30 days of learning of certain events, including criminal charges. This disclosure requirement ensures that investors and regulators have current information about individuals working in the securities industry.

The Form U4 is a critical disclosure document that allows firms, regulators, and investors to assess the background and character of financial professionals. When representatives fail to disclose criminal charges, it deprives their firms and clients of information that may be material to the trust placed in them.

The suspension is in effect from December 16, 2024, through April 15, 2025.

Investors can check the background of their financial professionals through FINRA's BrokerCheck service, which includes information from Form U4 disclosures. This case demonstrates the importance of timely disclosure of criminal matters.

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According to FINRA, Paul Edwards was assessed a deferred fine of $5,000 and suspended from association with any FINRA member firm in all capacities for two months for forging customer signatures and falsifying firm documents.

Edwards electronically signed two customers' names on an insurance appl...

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According to FINRA, Paul Edwards was assessed a deferred fine of $5,000 and suspended from association with any FINRA member firm in all capacities for two months for forging customer signatures and falsifying firm documents.

Edwards electronically signed two customers' names on an insurance application without authorization. Upon learning of the forgery, one customer complained to Edwards' firm. Edwards never submitted the form to the insurance company or his firm.

Additionally, Edwards falsified seven documents by altering them after customers had signed them. Edwards requested that customers sign blank forms, which he then completed after they were signed and submitted to the firm. Five of the altered documents were required books and records of the firm, including automatic investment authorization forms, one-time distribution request forms, and an asset movement authorization form.

Although none of the customers who signed blank forms complained and the underlying transactions were authorized, this conduct is nonetheless serious. Having customers sign blank forms and later completing them creates risk that the completed documents may not reflect the customers' actual intentions.

Forging signatures and falsifying documents undermines the integrity of the client-advisor relationship and the firm's recordkeeping systems. Even when no customer harm results, this conduct demonstrates a disregard for proper procedures and customer consent.

The suspension was in effect from December 16, 2024, through February 15, 2025. Investors should never sign blank documents and should review all documents before signing.

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According to FINRA, Sharon Green was fined $5,000 and suspended from association with any FINRA member firm in all capacities for one month for engaging in an outside business activity without providing prior written notice to her member firm.

Green provided consulting services to individuals, in...

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According to FINRA, Sharon Green was fined $5,000 and suspended from association with any FINRA member firm in all capacities for one month for engaging in an outside business activity without providing prior written notice to her member firm.

Green provided consulting services to individuals, including three customers of the firm who were all seniors. The services related to estate planning, medical care, family mediation, and budgeting and debt management. Green received approximately $35,000 in compensation for these services.

FINRA rules require registered representatives to disclose outside business activities so firms can evaluate potential conflicts of interest. When representatives provide paid consulting services to their brokerage customers, particularly in areas like estate planning and financial management, significant conflicts may arise.

The fact that three of Green's consulting clients were senior customers of her firm raises additional concerns. Seniors may be particularly trusting of their financial advisors and may not fully appreciate the potential conflicts when paying them for additional services.

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

Investors, particularly seniors, should be cautious about paying their financial advisors for services outside the normal brokerage relationship. Such arrangements should be disclosed to the firm so appropriate oversight can be provided.

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According to FINRA, Jack David Faller was assessed a deferred fine of $5,000 and suspended from association with any FINRA member firm in all capacities for nine months for creating false branch inspection reports.

Faller was the designated principal at his former firm responsible for compliance ...

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According to FINRA, Jack David Faller was assessed a deferred fine of $5,000 and suspended from association with any FINRA member firm in all capacities for nine months for creating false branch inspection reports.

Faller was the designated principal at his former firm responsible for compliance with branch inspection requirements, but he failed to prepare any branch office inspection reports for the firm's sole branch office. When the firm's Chief Compliance Officer asked if he had copies of the branch inspections, Faller admitted he had not completed them but offered to create the reports retroactively.

At the time Faller offered to create the reports, he had not been associated with the firm for over a year. The CCO submitted these fabricated branch inspection reports to FINRA in response to a regulatory request. Neither Faller nor the CCO disclosed to FINRA that the reports were recently created until FINRA discovered they were not contemporaneous records.

By participating in creating these false reports, Faller caused the firm to maintain inaccurate books and records.

Branch inspections are an important supervisory control designed to ensure that branch offices are operating in compliance with firm policies and regulatory requirements. When firms fail to conduct these inspections and then create false records to cover up the failure, it undermines the regulatory framework designed to protect investors.

The suspension is in effect from December 16, 2024, through September 15, 2025.

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According to FINRA, Sean P. McCabe was fined $5,000, suspended from association with any FINRA member firm in all capacities for three months, and ordered to pay $19,275 plus interest in restitution to a customer for excessively and unsuitably trading the customer's account.

McCabe recommended hi...

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According to FINRA, Sean P. McCabe was fined $5,000, suspended from association with any FINRA member firm in all capacities for three months, and ordered to pay $19,275 plus interest in restitution to a customer for excessively and unsuitably trading the customer's account.

McCabe recommended high frequency in-and-out trading to the customer, including recommending that the customer sell positions he had recently opened even when the price of the security had not materially changed. The customer, a dairy farmer in his late fifties with a speculative risk tolerance, relied on McCabe's advice and routinely followed his recommendations.

As a result, McCabe exercised de facto control over the customer's account. McCabe's trading generated $19,275 in commissions while causing $57,445 in realized losses for the customer.

Excessive trading, also known as churning, occurs when a broker trades a customer's account primarily to generate commissions rather than to benefit the customer. This is a serious violation of the broker's duty to act in the customer's best interest.

Signs of excessive trading include frequent buying and selling, short holding periods, and commission costs that are disproportionate to account gains. Investors should monitor their accounts for these warning signs and question any trading activity they don't understand.

The suspension is in effect from January 6, 2025, through April 5, 2025. The restitution order ensures the customer is compensated for the excessive commissions charged.

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According to FINRA, Mary Christine Beslagic was assessed a deferred fine of $5,000 and suspended from association with any FINRA member firm in all capacities for two months for willfully violating Regulation Best Interest (Reg BI) by recommending that customers invest home equity loan proceeds in m...

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According to FINRA, Mary Christine Beslagic was assessed a deferred fine of $5,000 and suspended from association with any FINRA member firm in all capacities for two months for willfully violating Regulation Best Interest (Reg BI) by recommending that customers invest home equity loan proceeds in mutual funds.

Beslagic was aware that the customers intended to use their liquified home equity proceeds for specific purposes and that they had several near-term liquidity needs. Despite this knowledge, she recommended they invest in mutual funds.

The mutual funds began declining in value shortly after the customers purchased them. As a result, the customers had to sell a portion of their investments at a loss and take out margin loans totaling approximately $25,000 to meet their near-term liquidity needs. Beslagic's firm provided compensation to the customers totaling $24,276 for their losses.

Regulation Best Interest requires broker-dealers and their representatives to act in the best interest of their retail customers when making recommendations. This includes considering the customer's investment profile, including their liquidity needs and investment timeline.

Recommending that customers invest funds needed for near-term expenses in products that may decline in value and be difficult to liquidate without loss is inconsistent with acting in the customer's best interest.

The suspension was in effect from December 16, 2024, through February 15, 2025. Investors should ensure their financial advisors understand their liquidity needs before making investment recommendations.

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According to FINRA, Donald R. Ayers Jr. was assessed a deferred fine of $5,000 and suspended from association with any FINRA member firm in all capacities for four months for willfully failing to disclose or timely disclose 10 liens and judgments totaling approximately $230,000 on his Form U4.

Ay...

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According to FINRA, Donald R. Ayers Jr. was assessed a deferred fine of $5,000 and suspended from association with any FINRA member firm in all capacities for four months for willfully failing to disclose or timely disclose 10 liens and judgments totaling approximately $230,000 on his Form U4.

Ayers failed to timely disclose nine of the liens or judgments, with delays ranging up to 700 days late. One lien remains undisclosed. Most of the liens and judgments remain unsatisfied.

Additionally, Ayers inaccurately attested on firm annual compliance questionnaires that he did not have any unsatisfied judgments or liens in the last year.

FINRA rules require registered representatives to disclose liens and judgments over $5,000 on their Form U4. This disclosure requirement helps investors and firms assess the financial responsibility and character of financial professionals. Financial difficulties may indicate increased risk of misconduct motivated by financial pressure.

The suspension is in effect from January 6, 2025, through May 5, 2025.

Investors can check the background of their financial professionals through FINRA's BrokerCheck service, which includes information about liens, judgments, and bankruptcies. This information may be relevant to investors in evaluating the trustworthiness of individuals handling their investments.

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According to FINRA, Robert Alan Yedid was assessed a deferred fine of $2,500 and suspended from association with any FINRA member firm in all capacities for 15 business days for sharing $6,000 in transaction-related compensation with an unregistered person.

Yedid's member firm served as co-manage...

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According to FINRA, Robert Alan Yedid was assessed a deferred fine of $2,500 and suspended from association with any FINRA member firm in all capacities for 15 business days for sharing $6,000 in transaction-related compensation with an unregistered person.

Yedid's member firm served as co-manager on a secondary public offering for an issuer that Yedid referred to the firm. As compensation for the referral, the firm paid Yedid a percentage of the co-manager fees it earned.

Yedid then shared a portion of this compensation with an individual employed by an affiliate of his firm who was not registered. This individual supported the secondary public offering as part of the issuer's investor relations team. Yedid was aware that the individual was not registered.

After Yedid's firm discovered the payment, the firm suspended him for two weeks and imposed a $6,000 fine, which he paid.

FINRA rules prohibit registered representatives from sharing transaction-based compensation with unregistered individuals. This requirement helps ensure that only qualified, supervised individuals are compensated for securities activities.

The suspension was in effect from January 6, 2025, through January 27, 2025.

Investors benefit from knowing that individuals receiving transaction-based compensation must be properly registered and subject to regulatory oversight. Payments to unregistered individuals circumvent this protective framework.

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According to FINRA, Steven Michael Blanchard was assessed a deferred fine of $15,000 and suspended from association with any FINRA member firm in all capacities for two years for submitting falsified documents to his member firm and providing false information to FINRA.

Blanchard submitted falsif...

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According to FINRA, Steven Michael Blanchard was assessed a deferred fine of $15,000 and suspended from association with any FINRA member firm in all capacities for two years for submitting falsified documents to his member firm and providing false information to FINRA.

Blanchard submitted falsified documents to his firm during an internal investigation of a firm customer with whom Blanchard had a personal relationship. The investigation focused on whether the customer had submitted a fabricated offer of employment from the firm in support of a mortgage loan application.

To make the firm believe he had legitimately hired the customer, Blanchard produced an offer letter he fabricated and a purported email exchange using the firm's email system. In fact, the emails had been fabricated and the firm's email system had no record of them. Blanchard also fabricated an email exchange between the customer and the mortgage company and forwarded it from his firm email account.

During FINRA's investigation, Blanchard provided false information and documents, including falsely representing that his offer letter was genuine and producing fabricated documents purportedly showing the customer had performed marketing services for the firm. Blanchard subsequently recanted and accepted responsibility for the false information and documents.

The suspension is in effect from January 6, 2025, through January 5, 2027.

This case demonstrates the serious consequences of falsifying documents and lying to regulators. Blanchard's two-year suspension reflects the severity of his misconduct.

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According to FINRA, Emilio Guajardo Jr. was assessed a deferred fine of $5,000, suspended from association with any FINRA member firm in all capacities for three months, and ordered to pay deferred disgorgement of $34,878.29 plus interest for overconcentrating customer accounts in a single-sector Un...

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According to FINRA, Emilio Guajardo Jr. was assessed a deferred fine of $5,000, suspended from association with any FINRA member firm in all capacities for three months, and ordered to pay deferred disgorgement of $34,878.29 plus interest for overconcentrating customer accounts in a single-sector Unit Investment Trust (UIT).

Guajardo recommended that customers invest in a UIT that invested only in the energy sector, despite these recommendations being inconsistent with the customers' investment objectives and risk tolerances. His recommendations resulted in concentrations ranging from 22 percent to 99 percent of customers' account assets in this single alternative investment.

Guajardo obtained commissions totaling $34,878.29 from these recommendations. His member firm entered into settlements with the affected customers.

Concentration risk occurs when a portfolio is overly weighted in a single sector, security, or asset class. When a single investment represents a large percentage of a customer's portfolio, the customer faces increased risk if that investment declines in value.

Unit Investment Trusts that focus on a single sector like energy can experience significant volatility based on sector-specific factors. Recommending high concentrations in such products to customers without appropriate risk tolerances violates the broker's duty to make suitable recommendations.

The suspension is in effect from January 6, 2025, through April 5, 2025. Investors should review their portfolios for excessive concentration and discuss diversification with their financial advisors.

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