Bad Brokers

According to FINRA, Ronald Cellini was fined $5,000 and suspended from association with any FINRA member firm in all capacities for one month for certifying that he had completed continuing education required to renew his state insurance license when another person had actually completed it on his b...

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According to FINRA, Ronald Cellini was fined $5,000 and suspended from association with any FINRA member firm in all capacities for one month for certifying that he had completed continuing education required to renew his state insurance license when another person had actually completed it on his behalf.

Cellini certified to the State of New York that he had personally completed 15 hours of continuing education when, in fact, he had not done so.

Continuing education requirements exist to ensure that licensed professionals maintain current knowledge of laws, regulations, products, and best practices. When individuals have others complete their continuing education, they may lack the knowledge necessary to properly serve their clients.

False certification to a state regulatory authority is also a serious matter that reflects on the individual's character and integrity. Financial professionals are expected to be honest in their dealings with regulators.

The suspension is in effect from January 21, 2025, through February 20, 2025.

Investors trust that their financial professionals have the training and knowledge required to advise them properly. This case demonstrates that regulators take seriously any misconduct involving false certifications about professional qualifications.

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According to FINRA, Justin Daniel Muccigrosso was assessed a deferred fine of $5,000 and suspended from association with any FINRA member firm in all capacities for six months for improperly using his member firm's funds by submitting $3,072.62 in meal expenses that did not comply with firm policy.
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According to FINRA, Justin Daniel Muccigrosso was assessed a deferred fine of $5,000 and suspended from association with any FINRA member firm in all capacities for six months for improperly using his member firm's funds by submitting $3,072.62 in meal expenses that did not comply with firm policy.

Muccigrosso's firm allowed employees to charge overtime meals if they worked in their assigned firm office beyond 8 p.m. on weekdays or for four hours or more on weekends or firm holidays and consumed the meal on-site. However, Muccigrosso had meals delivered to a firm office to which he was not assigned and where he was not working.

The office was located near Muccigrosso's personal residence, and in many cases, Muccigrosso left delivery notes instructing that the meals be delivered to his residential address. After the expenses were identified, Muccigrosso repaid the firm.

While the amount involved was relatively modest, this conduct demonstrates a willingness to misuse firm resources and be dishonest about expense claims. Integrity is fundamental to the relationship between financial professionals and their firms and clients.

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

Investors should know that their financial advisors are expected to act with honesty and integrity in all aspects of their professional conduct, including in their dealings with their employers.

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According to FINRA, Vincent William LaBarbara was fined $5,000 and suspended from association with any FINRA member firm in all capacities for two months for entering into a lending arrangement with a customer without providing notice to or obtaining approval from his member firm.

LaBarbara's cus...

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According to FINRA, Vincent William LaBarbara was fined $5,000 and suspended from association with any FINRA member firm in all capacities for two months for entering into a lending arrangement with a customer without providing notice to or obtaining approval from his member firm.

LaBarbara's customer, who was a long-time friend and real estate lawyer, offered to assist LaBarbara with a home purchase. The customer obtained a mortgage, and the funds were used to make a home purchase on LaBarbara's behalf. In return, LaBarbara agreed to make all payments due on the customer's mortgage.

Subsequently, the customer transferred title to the house to LaBarbara after about two years when approximately $300,000 remained due on the mortgage. LaBarbara has timely made all payments due on the mortgage.

FINRA rules generally prohibit registered representatives from entering into lending arrangements with customers unless the customer is a family member, the lending is done through the customer's business, or the customer is a registered person. These restrictions exist because lending arrangements can create conflicts of interest and may be used to facilitate misconduct.

Even though LaBarbara's arrangement with his customer friend was personal in nature and no harm appears to have resulted, the failure to disclose it to the firm violated FINRA rules.

The suspension is in effect from January 21, 2025, through March 20, 2025.

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According to FINRA, Jonathan Earl Best is facing charges alleging that he effected trades in a senior customer's account without obtaining required authorization, totaling $14,199,847 in principal value.

The complaint alleges that the customer was the only person authorized to transact in the acc...

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According to FINRA, Jonathan Earl Best is facing charges alleging that he effected trades in a senior customer's account without obtaining required authorization, totaling $14,199,847 in principal value.

The complaint alleges that the customer was the only person authorized to transact in the account, which was non-discretionary. Best's firm prohibited discretionary trading in retail brokerage accounts.

Best allegedly became aware that the customer was exhibiting signs of diminished capacity and informed a relative that he could not effect transactions due to her condition. Best then allegedly sought to become the customer's co-power of attorney but his firm rejected this request and instructed him to formally recuse himself from the appointment.

Despite this, Best allegedly proceeded to effect the purchase of laddered brokered certificates of deposit in the customer's account with cash proceeds from matured and called bonds. Best earned $10,760.88 in compensation from these trades.

The complaint also alleges that Best submitted false compliance attestations stating he had no concerns about any senior investors' capacity to make sound decisions, when he knew the customer could not understand or authorize trades due to her diminished capacity.

These are allegations that have not been adjudicated. Best is entitled to a hearing to contest these charges. If proven, this case would represent a serious breach of duties owed to a vulnerable senior customer.

Investors and their families should be vigilant about signs of diminished capacity and ensure proper legal arrangements are in place.

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According to FINRA, James Joseph Lukezic is facing charges alleging that he placed mutual fund exchanges totaling approximately $1.1 million in the accounts of five customers without their authorization, causing losses of approximately $44,500.

The complaint alleges that all five customers compla...

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According to FINRA, James Joseph Lukezic is facing charges alleging that he placed mutual fund exchanges totaling approximately $1.1 million in the accounts of five customers without their authorization, causing losses of approximately $44,500.

The complaint alleges that all five customers complained they had not authorized the mutual fund exchange transactions made in their accounts. The day following the trades, Lukezic allegedly called the firm's affiliated transfer agent to ask how the firm would be paid on the exchanges, and was informed they were ineligible for commissions.

The transfer agent subsequently cancelled and reversed the transactions and returned the original mutual fund holdings to the customers' accounts. On calls with the transfer agent, Lukezic allegedly stated he did not effect the exchanges at issue.

The complaint also alleges that Lukezic provided false and misleading written statements to FINRA, falsely stating that his firm did not have the ability to execute trades on the transfer agent's platform and that he was not involved in placing any trades. Additionally, Lukezic allegedly provided false on-the-record testimony denying he executed the mutual fund exchanges.

These are allegations that have not been adjudicated. Lukezic is entitled to a hearing to contest these charges. If proven, the combination of unauthorized trading and false statements to regulators would represent serious misconduct.

Investors should review their account statements regularly and report any unauthorized transactions immediately.

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According to FINRA, Edward Jones was ordered to pay $4,440,979 in restitution to customers who were harmed by the firm's failure to provide available mutual fund sales charge waivers and fee rebates.

Many mutual fund issuers offer a right of reinstatement, which allows investors to reinvest in sh...

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According to FINRA, Edward Jones was ordered to pay $4,440,979 in restitution to customers who were harmed by the firm's failure to provide available mutual fund sales charge waivers and fee rebates.

Many mutual fund issuers offer a right of reinstatement, which allows investors to reinvest in shares of a fund or fund family after previously selling shares without incurring a front-end sales charge, or to recoup all or part of a contingent deferred sales charge.

FINRA found that Edward Jones failed to establish and maintain a supervisory system reasonably designed to supervise whether eligible customers received available mutual fund sales charge waivers and fee rebates through rights of reinstatement. As a result, customers paid excess sales charges and fees to which they were not entitled.

No fine was imposed in recognition of the firm's extraordinary cooperation with FINRA's investigation. The firm voluntarily initiated an extensive review of its systems, engaged an outside consultant to identify affected customers and calculate restitution, and established a plan to efficiently identify, notify, and repay eligible customers.

This case is part of a FINRA targeted examination initiated in 2020 that has secured over $9.5 million in restitution for affected mutual fund customers across five firms.

Investors should be aware that they may be entitled to sales charge waivers when reinvesting in mutual funds they previously owned. If you believe you were charged fees you should not have paid, contact your brokerage firm.

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According to FINRA, Osaic Wealth, Inc. and its affiliated broker-dealers were ordered to pay $3,096,490 in restitution to customers who were harmed by the firm's failure to provide available mutual fund sales charge waivers and fee rebates.

Many mutual fund issuers offer a right of reinstatement,...

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According to FINRA, Osaic Wealth, Inc. and its affiliated broker-dealers were ordered to pay $3,096,490 in restitution to customers who were harmed by the firm's failure to provide available mutual fund sales charge waivers and fee rebates.

Many mutual fund issuers offer a right of reinstatement, which allows investors to reinvest in shares of a fund or fund family after previously selling shares without incurring a front-end sales charge, or to recoup all or part of a contingent deferred sales charge.

FINRA found that Osaic Wealth failed to establish and maintain a supervisory system reasonably designed to supervise whether eligible customers received these benefits. As a result, customers paid excess sales charges and fees.

No fine was imposed in recognition of the firm's extraordinary cooperation with FINRA's investigation. The firm voluntarily initiated an extensive review of its systems, engaged an outside consultant to identify affected customers and calculate restitution, and established a plan to efficiently identify, notify, and repay eligible customers.

This case is part of a FINRA targeted examination initiated in 2020 that has secured over $9.5 million in restitution for affected mutual fund customers across five firms.

Investors should understand the fee waivers and rebates available to them when investing in mutual funds. Rights of reinstatement can provide significant savings when reinvesting in funds previously owned.

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According to FINRA, Cambridge Investment Research, Inc. was ordered to pay $699,217 in restitution to customers who were harmed by the firm's failure to provide available mutual fund sales charge waivers and fee rebates.

Many mutual fund issuers offer a right of reinstatement, which allows invest...

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According to FINRA, Cambridge Investment Research, Inc. was ordered to pay $699,217 in restitution to customers who were harmed by the firm's failure to provide available mutual fund sales charge waivers and fee rebates.

Many mutual fund issuers offer a right of reinstatement, which allows investors to reinvest in shares of a fund or fund family after previously selling shares without incurring a front-end sales charge, or to recoup all or part of a contingent deferred sales charge.

FINRA found that Cambridge Investment Research failed to establish and maintain a supervisory system reasonably designed to supervise whether eligible customers received these benefits. As a result, customers paid excess sales charges and fees.

No fine was imposed in recognition of the firm's extraordinary cooperation with FINRA's investigation. The firm voluntarily initiated an extensive review of its systems, engaged an outside consultant to identify affected customers and calculate restitution, and established a plan to efficiently identify, notify, and repay eligible customers.

This case is part of a FINRA targeted examination initiated in 2020 that has secured over $9.5 million in restitution for affected mutual fund customers across five firms.

Investors should ask their financial advisors about any available fee waivers or rebates before making mutual fund purchases, particularly when reinvesting in funds they have previously owned.

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According to FINRA, Spartan Capital Securities, LLC, along with executives John Dennis Lowry and Kim Marie Monchik, were found in violation of disclosure requirements and ordered to pay significant fines.

The firm was censured, fined $600,000, and required to retain an independent consultant to r...

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According to FINRA, Spartan Capital Securities, LLC, along with executives John Dennis Lowry and Kim Marie Monchik, were found in violation of disclosure requirements and ordered to pay significant fines.

The firm was censured, fined $600,000, and required to retain an independent consultant to review its policies relating to Form U4 and Form U5 disclosures. Lowry was fined $20,000 and suspended for two years, while Monchik was fined $10,000 and also suspended for two years.

The violations centered on the firm's systematic failure to amend, or timely amend, the Form U4s and Form U5s of its registered representatives to disclose customer arbitrations, settlements, and reportable financial events. FINRA found that these failures were willful, as the firm knowingly elected not to disclose arbitrations against its executive officers despite being cautioned twice by FINRA.

Lowry was personally involved in 12 arbitrations resulting in awards and settlements totaling more than $1.6 million. He failed to disclose eight settlements and disclosed four late. Monchik was named in 12 arbitrations alleging supervision failures, with awards totaling over $360,000. She failed to disclose 11 arbitrations and disclosed one 562 days late.

Investors should understand that brokers and firms are required to promptly disclose arbitration filings, complaints, and settlements on their regulatory forms. These disclosures appear on BrokerCheck and help investors make informed decisions. When firms and brokers hide this information, it deprives investors of critical data about their financial professional's history.

The sanctions are currently not in effect pending SEC review.

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According to FINRA, Drexel Hamilton, LLC and four of its representatives were sanctioned for submitting fraudulent retail orders for municipal bonds.

The firm was censured, fined $300,000, and ordered to pay disgorgement of $837,353. Individual representatives received varying sanctions: Michael ...

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According to FINRA, Drexel Hamilton, LLC and four of its representatives were sanctioned for submitting fraudulent retail orders for municipal bonds.

The firm was censured, fined $300,000, and ordered to pay disgorgement of $837,353. Individual representatives received varying sanctions: Michael Ivcic was fined $30,000 and suspended for 15 months; Thomas Mead Jr. received a deferred fine of $15,000 and a six-month suspension in principal capacity; Frederick Phelan was fined $20,000 with a four-month suspension; and David Steigerwald was fined $30,000 with a six-month suspension.

The investigation revealed that on at least 572 occasions, the firm submitted orders designated as retail without a legitimate basis, using fake zip codes to make the orders appear as though they came from genuine retail customers. Additionally, on at least 44 occasions, orders exceeding the $1 million maximum were split into smaller orders to evade eligibility requirements.

Ivcic personally submitted 276 fraudulent retail orders with fake zip codes and split at least 29 oversized orders. Phelan and Steigerwald submitted 46 and 127 false orders respectively. Mead, as department head, failed to respond to red flags when a syndicate manager challenged numerous orders that did not appear to be for genuine retail customers.

This case highlights the importance of regulatory oversight in municipal bond markets. Retail order periods exist to give individual investors priority access to new bond issues. When firms circumvent these rules, they harm both the integrity of the market and individual investors who should have had first access to these securities.

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