Bad Brokers

According to FINRA, Anthony George Saab of Dallas, Texas was barred from association with any FINRA member in all capacities for refusing to provide documents and information requested by FINRA during an investigation into his sale of alternative investments.

Alternative investments include produ...

Read More

According to FINRA, Anthony George Saab of Dallas, Texas was barred from association with any FINRA member in all capacities for refusing to provide documents and information requested by FINRA during an investigation into his sale of alternative investments.

Alternative investments include products such as private placements, hedge funds, non-traded REITs, and other investments that are not publicly traded securities. These products often carry higher risks, less liquidity, and more complex fee structures than traditional investments.

When FINRA investigates sales of alternative investments, it typically examines whether the products were suitable for the customers who purchased them, whether material facts were disclosed, and whether the sales complied with applicable regulations.

Saab's refusal to provide requested documents and information prevented FINRA from completing its investigation. As a result, questions about the nature and appropriateness of his alternative investment sales remain unanswered.

A bar from the securities industry means Saab cannot work with any FINRA member firm in any capacity. This sanction protects future investors from potential harm.

For investors who purchased alternative investments from Saab, this bar should prompt careful review of those investments. Consider whether you fully understood the risks, fees, and liquidity limitations at the time of purchase. If you have concerns about whether the investments were appropriate for your situation, you may wish to consult with a securities attorney.

Alternative investments can be appropriate for some investors but carry risks that make them unsuitable for others. Understanding what you own and why you own it is essential for managing investment risk.

Show Less

According to FINRA, Nicholas Edward Stovall of New Richmond, Wisconsin was barred from association with any FINRA member in all capacities for participating in private securities transactions totaling $1,401,690 without disclosure to or approval from his member firm.

Stovall participated in the s...

Read More

According to FINRA, Nicholas Edward Stovall of New Richmond, Wisconsin was barred from association with any FINRA member in all capacities for participating in private securities transactions totaling $1,401,690 without disclosure to or approval from his member firm.

Stovall participated in the sale of promissory notes issued by entities claiming to provide financing to construction companies. He recommended these investments to six customers who purchased $1,101,690 of the notes and personally invested $300,000.

Stovall's participation included explaining the notes' terms to investors, introducing them to the issuers, helping complete investment documents, and assisting with money transfers.

The notes' issuers ultimately defaulted and ceased operating. In 2022, two state securities regulators brought actions against the issuers and others, alleging the promissory notes were part of a fraudulent scheme. Although Stovall was not named as a defendant in those actions, the investments he recommended resulted in significant losses for his customers.

FINRA rules require registered persons to provide prior written notice to their firms before participating in private securities transactions. This requirement allows firms to supervise such activities and evaluate whether the investments are appropriate. When representatives sell products outside firm supervision, customers lose important protections.

For investors who purchased these promissory notes, the bar of Stovall and the default of the issuers likely means recovery prospects are limited. However, if you were one of Stovall's customers or invested in these promissory notes, you may wish to consult with a securities attorney about potential claims against Stovall's former firm or other parties.

Be extremely cautious about promissory notes offered outside of registered broker-dealer channels.

Show Less

According to FINRA, Michael Richard Rosalia of Blue Point, New York was barred from association with any FINRA member in all capacities for failing to appear for and provide on-the-record testimony requested by FINRA.

The investigation concerned allegations that Rosalia engaged in excessive and u...

Read More

According to FINRA, Michael Richard Rosalia of Blue Point, New York was barred from association with any FINRA member in all capacities for failing to appear for and provide on-the-record testimony requested by FINRA.

The investigation concerned allegations that Rosalia engaged in excessive and unsuitable trading in customer accounts. FINRA sought information and documents relating to whether Rosalia considered customers' investment profiles when making recommendations and whether his recommendations were consistent with customers' investment objectives and risk tolerance.

Excessive trading, sometimes called "churning," occurs when a broker trades in a customer's account primarily to generate commissions rather than to benefit the customer. This practice can cause substantial harm through commission costs and potential losses from inappropriate trading activity.

When FINRA investigates excessive trading allegations, testimony from the broker is essential to understand the rationale for trades, the nature of customer relationships, and whether the broker was exercising appropriate judgment in making recommendations.

Rosalia's failure to appear for testimony prevented FINRA from completing its investigation into whether customers were harmed by his trading activity.

For investors who held accounts with Rosalia, this bar and the underlying allegations should prompt review of account statements from the relevant period. Warning signs of excessive trading include high commission totals, frequent buying and selling of the same or similar securities, and account losses despite active trading.

If you believe you were subject to excessive trading, you may have claims for damages. The statute of limitations for such claims can be limited, so prompt consultation with a securities attorney may be important.

Show Less

According to FINRA, Johnathon Sawaged of Poughquag, New York was barred from association with any FINRA member in all capacities for refusing to appear for on-the-record testimony requested by FINRA.

The investigation concerned allegations made by Sawaged's member firm on his Form U5 termination ...

Read More

According to FINRA, Johnathon Sawaged of Poughquag, New York was barred from association with any FINRA member in all capacities for refusing to appear for on-the-record testimony requested by FINRA.

The investigation concerned allegations made by Sawaged's member firm on his Form U5 termination notice. The firm reported that Sawaged was terminated for inappropriate handling of client payments while working for an affiliated tax services entity.

The handling of client funds is a fundamental area of trust in financial services. When firms report terminations related to inappropriate handling of payments, it raises serious concerns about potential conversion, misappropriation, or other misconduct involving client money.

Sawaged's refusal to provide testimony prevented FINRA from investigating the full scope of the alleged misconduct. Without his testimony, questions about what happened with client payments remain unanswered.

A bar from the securities industry is a permanent sanction that removes an individual from a position of trust with respect to customer assets. When someone refuses to answer questions about allegations of inappropriate handling of client funds, the bar serves to protect future customers from potential similar conduct.

For investors who may have used the tax services affiliate where Sawaged worked, or who had accounts with him at the brokerage firm, this bar should prompt review of any transactions or payments that passed through his hands. If you have concerns about whether funds were handled appropriately, you may wish to consult with an attorney.

Investors can verify any individual's registration status and review disciplinary history through FINRA BrokerCheck.

Show Less

According to FINRA, Ryan Spencer of Jackson, Tennessee was barred from association with any FINRA member in all capacities for refusing to appear for on-the-record testimony requested by FINRA.

The investigation concerned allegations made by Spencer's member firm in a Form U5 filing. The firm dis...

Read More

According to FINRA, Ryan Spencer of Jackson, Tennessee was barred from association with any FINRA member in all capacities for refusing to appear for on-the-record testimony requested by FINRA.

The investigation concerned allegations made by Spencer's member firm in a Form U5 filing. The firm disclosed that Spencer was permitted to resign due to non-compliance with its expense policy.

Expense policy violations can range from minor administrative issues to more serious conduct such as expense fraud or misappropriation of firm funds. When FINRA investigates such disclosures, testimony from the individual is important to understand the nature and scope of the conduct.

Spencer's refusal to provide testimony prevented FINRA from completing its investigation. As a result, the specific nature of the expense policy violations remains unclear.

The bar from the securities industry means Spencer cannot work with any FINRA member firm in any capacity. While the underlying conduct involved expense policies rather than direct customer harm, failure to cooperate with FINRA investigations is itself a serious violation that warrants this sanction.

Financial professionals are expected to act with integrity in all aspects of their work, including compliance with their firms' internal policies. When individuals are permitted to resign due to policy violations and then refuse to explain the circumstances to regulators, it raises questions about what they may be trying to hide.

For investors, this case is a reminder that you can check the employment history and regulatory record of any broker through FINRA BrokerCheck. If a broker's Form U5 shows they were permitted to resign due to policy violations, this may warrant additional scrutiny before establishing a relationship.

Show Less

According to FINRA, Nicholas Michael Armellino of Haldon, New Jersey was barred from association with any FINRA member in all capacities for refusing to appear for on-the-record testimony requested by FINRA.

The investigation originated from a regulatory tip submitted to FINRA. Although Armellino...

Read More

According to FINRA, Nicholas Michael Armellino of Haldon, New Jersey was barred from association with any FINRA member in all capacities for refusing to appear for on-the-record testimony requested by FINRA.

The investigation originated from a regulatory tip submitted to FINRA. Although Armellino initially cooperated with the investigation, he subsequently ceased doing so and refused to appear for testimony.

Regulatory tips can come from various sources including customers, colleagues, other regulators, or the public. When FINRA receives tips alleging potential misconduct, it investigates to determine whether violations occurred.

Armellino's initial cooperation followed by his refusal to continue suggests he may have become concerned about where the investigation was heading. When individuals stop cooperating mid-investigation, it often indicates they are trying to avoid revealing information that could be harmful to them.

The bar from the securities industry is a permanent sanction. While the specific allegations underlying the regulatory tip are not disclosed, Armellino's refusal to provide testimony prevented FINRA from completing its investigation and determining whether customers or markets were harmed.

Cooperation with FINRA investigations is a fundamental obligation of all registered persons. This obligation continues even when the investigation may lead to adverse findings. When individuals refuse to cooperate, FINRA cannot fulfill its investor protection mission.

For investors who may have worked with Armellino, this bar should prompt review of account activity. If you have concerns about any transactions or recommendations, consider consulting with a securities attorney.

Investors can review any broker's regulatory history through FINRA BrokerCheck at brokercheck.finra.org.

Show Less

According to FINRA, Damon Manuel Perez of St. Johns, Florida was barred from association with any FINRA member in all capacities for refusing to produce information and documents requested by FINRA during an investigation that arose from a regulatory tip.

When FINRA receives tips about potential ...

Read More

According to FINRA, Damon Manuel Perez of St. Johns, Florida was barred from association with any FINRA member in all capacities for refusing to produce information and documents requested by FINRA during an investigation that arose from a regulatory tip.

When FINRA receives tips about potential misconduct by registered persons, it investigates to determine whether violations occurred and whether investors were harmed. The information and documents requested from the subject of an investigation are typically essential to understanding the alleged conduct.

Perez's refusal to provide the requested materials prevented FINRA from completing its investigation. As a result, the specific nature of the conduct alleged in the regulatory tip remains uninvestigated.

A bar from the securities industry is a permanent sanction that removes an individual from positions where they could potentially harm investors. When someone refuses to cooperate with a FINRA investigation, the bar serves both as a sanction for the non-cooperation and as protection for the investing public.

The obligation to cooperate with FINRA investigations is a condition of registration in the securities industry. All registered persons agree to this obligation when they register, and failure to comply results in the most serious sanction available—a permanent bar.

For investors who may have worked with Perez, this bar should prompt careful review of account activity and any recommendations he made. If you have concerns about transactions in your account, you may wish to consult with a securities attorney about your options.

Information about any registered person's employment history, qualifications, and regulatory history is available through FINRA BrokerCheck.

Show Less

According to FINRA, Jody Ryan Vander Weide of Grand Rapids, Michigan was barred from association with any FINRA member in all capacities for failing to provide documents and information requested by FINRA in connection with its investigation of his undisclosed outside business activity.

Vander We...

Read More

According to FINRA, Jody Ryan Vander Weide of Grand Rapids, Michigan was barred from association with any FINRA member in all capacities for failing to provide documents and information requested by FINRA in connection with its investigation of his undisclosed outside business activity.

Vander Weide initially cooperated with FINRA's investigation but subsequently stopped doing so. His decision to cease cooperation prevented FINRA from fully investigating the nature and extent of his undisclosed outside business activity.

Outside business activities (OBAs) must be disclosed to member firms because they can create conflicts of interest, distract from the representative's duties to customers, and may involve securities-related activities that should be supervised. When representatives fail to disclose OBAs, firms cannot evaluate these risks.

The investigation into Vander Weide's undisclosed OBA was presumably intended to determine what the activity involved, whether it affected his customers, and whether it involved any securities-related conduct that required firm supervision.

By refusing to continue cooperating, Vander Weide prevented FINRA from answering these questions. The bar removes him from the securities industry, protecting future investors from potential harm.

For investors who worked with Vander Weide, this bar and the underlying investigation into undisclosed outside business activity should prompt review of any recommendations he made. If the undisclosed activity involved investments or other financial services, customers may have been disadvantaged by the lack of firm oversight.

Investors should always be aware of whether their broker has outside business activities and understand how those activities might affect the advice they receive. This information is available through FINRA BrokerCheck.

Show Less

According to FINRA, John Emil Fendrich Jr. of Red Bank, New Jersey was fined $5,000, suspended from association with any FINRA member in all capacities for three months, and ordered to pay $14,214 plus interest in partial restitution to a customer.

Fendrich willfully violated Regulation Best Inte...

Read More

According to FINRA, John Emil Fendrich Jr. of Red Bank, New Jersey was fined $5,000, suspended from association with any FINRA member in all capacities for three months, and ordered to pay $14,214 plus interest in partial restitution to a customer.

Fendrich willfully violated Regulation Best Interest by recommending trades to a retail customer that were excessive and not in the customer's best interest. The customer's account had an investment objective of speculation.

Fendrich and another registered representative shared recommendations and commissions for this customer's account. Their trading generated $28,428 in commissions while causing $95,393 in realized losses—meaning the customer lost money while paying substantial commissions.

The restitution amount of $14,214 represents half of the commissions charged, reflecting Fendrich's shared responsibility with the other representative.

Excessive trading occurs when a broker trades in a customer's account more than is appropriate given the customer's investment objectives and profile. Even when an account has a speculation objective, trading that generates significant commissions while producing substantial losses raises serious concerns about whether the trading served the customer's interest or primarily the broker's commission income.

Regulation Best Interest requires brokers to act in the best interest of retail customers when making recommendations. Trading that enriches the broker through commissions while impoverishing the customer through losses is inconsistent with this obligation.

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

For investors, this case illustrates the importance of monitoring your account activity and understanding the relationship between trading frequency, commissions paid, and investment returns. If your account shows high activity, significant commission costs, and poor performance, these may be warning signs.

Show Less

According to FINRA, Robert William Fort of Dallas, Texas was fined $5,000 and suspended from association with any FINRA member in all capacities for one month for failing to timely amend his Form U4 to disclose a felony charge.

After being arrested for a non-financial-related criminal offense, Fo...

Read More

According to FINRA, Robert William Fort of Dallas, Texas was fined $5,000 and suspended from association with any FINRA member in all capacities for one month for failing to timely amend his Form U4 to disclose a felony charge.

After being arrested for a non-financial-related criminal offense, Fort disclosed the arrest to his member firm and told the firm he anticipated that his arrest would result in a felony charge. When he was subsequently indicted and charged with a felony, Fort failed to notify the firm and failed to amend his Form U4 as required.

Eight months later, the firm discovered the felony charge during a routine background recheck. Fort's Form U4 was then amended to disclose the charge.

Form U4 requires disclosure of certain criminal charges within 30 days. This requirement ensures that firms and regulators have current information about registered persons and can evaluate whether the conduct affects the person's fitness to work in the securities industry.

Even for non-financial criminal matters, disclosure is required because it allows for appropriate oversight and ensures customers and firms can make informed decisions. The disclosure requirement applies to charges, not just convictions, because the existence of pending charges is relevant information.

Fort's failure to disclose for eight months deprived his firm and its customers of this information during that period.

The suspension was in effect from June 2 through July 1, 2025.

For investors, all disclosed regulatory events and criminal charges are available through FINRA BrokerCheck. Reviewing this information before working with a broker can help you make informed decisions about whom you trust with your investments.

Show Less