Bad Brokers

According to FINRA, Todd Allen Leightey of Upper Sandusky, Ohio was fined $5,000 and suspended from association with any FINRA member in all capacities for four months for making unsuitable variable annuity recommendations and providing inaccurate information on applications.

Leightey recommended...

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According to FINRA, Todd Allen Leightey of Upper Sandusky, Ohio was fined $5,000 and suspended from association with any FINRA member in all capacities for four months for making unsuitable variable annuity recommendations and providing inaccurate information on applications.

Leightey recommended that three customers purchase variable annuities without a reasonable basis to believe the transactions were suitable based on their age, financial situation, liquidity needs, and investment time horizon.

One recommendation to a married couple, one of whom was a senior, resulted in more than half of their net worth being invested in variable annuities. For another customer, Leightey recommended a $6,000 variable annuity when the customer had no interest in or need for the product's particular features.

Variable annuities are complex products with surrender periods during which withdrawals trigger fees. They are generally unsuitable for customers who may need access to their funds or who don't need the specific features annuities provide.

Additionally, Leightey inaccurately stated on applications that customers intended to use annuitization and death benefit features when they did not, and misstated two customers' intended investment horizons. These inaccuracies caused the firm to collect and maintain false information that might have triggered supervisory review had the accurate information been provided.

Providing inaccurate information on applications can circumvent supervisory controls designed to identify potentially unsuitable recommendations.

The suspension is in effect from June 16 through October 15, 2025.

Investors considering variable annuities should ensure they understand all features, fees, and surrender periods, and confirm that the product meets a genuine need in their financial plan.

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According to FINRA, Jose Antonio Navarro of San Diego, California was assessed a deferred fine of $20,000 and suspended from association with any FINRA member in all capacities for 12 months for participating in undisclosed private securities transactions, borrowing from customers, and providing mis...

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According to FINRA, Jose Antonio Navarro of San Diego, California was assessed a deferred fine of $20,000 and suspended from association with any FINRA member in all capacities for 12 months for participating in undisclosed private securities transactions, borrowing from customers, and providing misleading information to FINRA.

After personally investing in an alternative energy company, Navarro introduced the investment opportunity to five customers who collectively invested $87,500. He recommended the investment and took steps to facilitate purchases. The company subsequently filed for bankruptcy and investors received no money back.

Navarro did not receive selling compensation but participated without notifying his firm. He also falsely represented on compliance agreements that he did not engage in selling away.

Additionally, through his tax preparation business, Navarro borrowed a total of $80,000 from two firm customers without seeking approval from his firm. Although these loans were documented and repaid, Navarro falsely represented to his firm that he did not make loans to clients.

When FINRA initially requested information, Navarro provided a partial and misleading response. He identified only one customer investor and stated that although he mentioned his investment to "personal friends," "no one expressed interest." He also failed to provide relevant emails. Only after a second request did Navarro correct his response and disclose the identities of the four other customers.

The 12-month suspension reflects the multiple violations and the initial misleading response to FINRA.

The suspension is in effect from May 19, 2025, through May 18, 2026.

Investors who invested in the alternative energy company on Navarro's recommendation may wish to consult with an attorney about potential claims.

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According to FINRA, Daniel Todd Lerner of Bedford Hills, New York was fined $5,000 and suspended from association with any FINRA member in all capacities for two months for recommending an unsuitable investment to a 92-year-old customer.

Lerner recommended that a 92-year-old retired customer purc...

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According to FINRA, Daniel Todd Lerner of Bedford Hills, New York was fined $5,000 and suspended from association with any FINRA member in all capacities for two months for recommending an unsuitable investment to a 92-year-old customer.

Lerner recommended that a 92-year-old retired customer purchase $60,000 of an illiquid, proprietary limited partnership. Prior to this recommendation, the customer's risk tolerance was listed as moderate. The investment represented approximately 25 percent of her liquid net worth.

Illiquid limited partnerships are generally unsuitable for elderly investors because these products typically cannot be easily sold and may require years before investors can access their money. A 92-year-old investor has limited investment time horizon and may need access to funds for healthcare or living expenses.

A moderate risk tolerance does not typically support investment in illiquid alternative products. And concentrating 25 percent of liquid net worth in a single illiquid investment is significant concentration risk for any investor, particularly a senior.

Contemporaneous with this action, FINRA accepted an AWC from Lerner's member firm ordering restitution of $3,600 to the customer.

The suspension is in effect from June 16 through August 15, 2025.

This case is part of a series of actions related to David Lerner Associates and its proprietary limited partnerships, demonstrating a pattern of unsuitable sales to seniors.

Investors, particularly seniors, should carefully consider whether illiquid investments are appropriate given their age, need for income, and potential need to access funds. Family members helping elderly relatives with finances should scrutinize recommendations for illiquid products.

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According to FINRA, Martin Lerner of Delray Beach, Florida was assessed a deferred fine of $10,000 and suspended from association with any FINRA member in any principal capacity for one month for failing to reasonably supervise sales of illiquid, proprietary limited partnerships.

Lerner was aware...

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According to FINRA, Martin Lerner of Delray Beach, Florida was assessed a deferred fine of $10,000 and suspended from association with any FINRA member in any principal capacity for one month for failing to reasonably supervise sales of illiquid, proprietary limited partnerships.

Lerner was aware of but failed to reasonably investigate and respond to red flags of potentially unsuitable recommendations. These red flags included patterns of sales of illiquid limited partnerships to seniors and unsophisticated investors.

Particularly concerning were sales made contemporaneously with changes to customers' investment profiles—including liquid net worth and risk tolerance modifications—that resulted in customers meeting eligibility criteria they would not have met without those changes.

When Lerner learned of these red flags, rather than investigating to confirm the products were suitable, he approved the sales without further inquiry.

Supervisors have an obligation to respond to red flags. When a pattern emerges of investment profiles being changed to make customers eligible for purchases, reasonable supervision requires inquiry into whether those changes are legitimate or whether they represent attempts to circumvent suitability requirements.

Approving sales without investigating red flags allows unsuitable recommendations to proceed and harms customers who rely on the firm's supervisory system for protection.

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

This case is part of a series of actions against David Lerner Associates and its personnel for unsuitable sales of proprietary limited partnerships to seniors and other vulnerable investors.

Investors should be alert if their investment profile is modified in connection with a purchase recommendation. Such changes should be initiated by you based on genuine changes in your circumstances, not to facilitate a particular investment.

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According to FINRA, Kenneth John Malm of Suffern, New York was assessed a deferred fine of $10,000 and suspended from association with any FINRA member in all capacities for seven months for accepting a bequest from a customer's estate without providing written notice to his firm or receiving approv...

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According to FINRA, Kenneth John Malm of Suffern, New York was assessed a deferred fine of $10,000 and suspended from association with any FINRA member in all capacities for seven months for accepting a bequest from a customer's estate without providing written notice to his firm or receiving approval.

After a customer's death, Malm learned he was named as a beneficiary of her estate and stood to inherit more than $1 million. The customer was not a member of Malm's immediate family. Nonetheless, Malm accepted and received the bequest.

FINRA rules require registered persons to provide written notice before accepting bequests from customers who are not immediate family members and to receive firm approval before accepting such bequests. These rules exist to prevent conflicts of interest and potential elder financial exploitation.

When a broker stands to inherit from a customer, it creates obvious conflicts. The broker may have incentives to encourage the customer to maintain or increase the bequest, which could influence recommendations and account management. Even if no improper influence occurred, accepting such a bequest without disclosure prevents firms from evaluating whether the relationship was appropriate.

Bequests to non-family members can also be evidence of undue influence over an elderly or vulnerable customer. Firms need to know about such arrangements to assess whether customers are being exploited.

The substantial amount of the bequest—more than $1 million—and Malm's failure to notify his firm resulted in a seven-month suspension.

The suspension is in effect from June 2, 2025, through January 1, 2026.

Families of elderly investors should be aware of their relatives' relationships with their brokers and alert to signs that a broker may be positioning themselves to receive benefits from the customer's estate.

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According to FINRA, Maxim Tulupnikoff of Trumbull, Connecticut was fined $5,000 and suspended from association with any FINRA member in all capacities for two months for making unsuitable recommendations of illiquid, proprietary limited partnerships to a married couple.

The customers were saving ...

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According to FINRA, Maxim Tulupnikoff of Trumbull, Connecticut was fined $5,000 and suspended from association with any FINRA member in all capacities for two months for making unsuitable recommendations of illiquid, proprietary limited partnerships to a married couple.

The customers were saving for retirement when Tulupnikoff first recommended they purchase one of the limited partnerships. Ultimately, he recommended nine purchases totaling $147,946 across the customers' joint account and their Individual Retirement Accounts.

Prior to their first purchase, the customers' investment profile reflected a moderately conservative risk tolerance. Illiquid limited partnerships are generally inconsistent with moderately conservative investment objectives because they cannot be easily sold and tie up investor capital for extended periods.

The placement of these illiquid investments in IRAs is particularly concerning because IRAs are often primary retirement savings vehicles. When retirement funds are locked up in illiquid investments, they may not be available when the customer needs them for retirement income.

FINRA previously accepted an AWC from Tulupnikoff's member firm ordering restitution of $7,949.16 and $927.60 to the customers.

The suspension is in effect from June 16 through August 15, 2025.

This case is part of a series of actions related to David Lerner Associates' sales of proprietary limited partnerships.

Investors saving for retirement should carefully consider whether illiquid investments are appropriate for their retirement accounts. These accounts may need to generate income or be accessible when you retire, which illiquid investments may not permit.

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According to FINRA, Jason David Rodriguez of Clifton, New Jersey was assessed a deferred fine of $7,500 and suspended from association with any FINRA member in all capacities for three months for willfully failing to amend his Form U4 to disclose felony charges.

On August 2, 2023, New Jersey char...

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According to FINRA, Jason David Rodriguez of Clifton, New Jersey was assessed a deferred fine of $7,500 and suspended from association with any FINRA member in all capacities for three months for willfully failing to amend his Form U4 to disclose felony charges.

On August 2, 2023, New Jersey charged Rodriguez with two felony counts of assault by automobile. These charges were required to be reported on his Form U4, but Rodriguez was aware of the charges and failed to amend his Form U4 within the required 30 days or notify his member firm at any point during his association.

In July 2024, after FINRA inquired about the charges, the firm amended Rodriguez's Form U4 to disclose them—nearly a year after the charges were filed.

Additionally, Rodriguez provided a false answer on a firm compliance certification, stating he had not previously been arrested, arraigned, indicted, or convicted of any criminal offense (other than a minor traffic violation).

Form U4 disclosure requirements exist to ensure that firms, regulators, and investors have accurate information about registered persons. Criminal charges, even for non-financial matters, are relevant to evaluating a person's fitness to work in the securities industry.

Willful failure to disclose required information can have consequences beyond FINRA sanctions, potentially including statutory disqualification from the securities industry.

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

Investors can view all disclosed information about registered persons, including criminal charges and regulatory actions, through FINRA BrokerCheck at brokercheck.finra.org.

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According to FINRA, Brian Court of Holtsville, New York was suspended from association with any FINRA member in all capacities for one month for exercising discretion in customer accounts without written authorization.

Although the customers understood that Court was placing trades in their accou...

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According to FINRA, Brian Court of Holtsville, New York was suspended from association with any FINRA member in all capacities for one month for exercising discretion in customer accounts without written authorization.

Although the customers understood that Court was placing trades in their accounts, none had given him prior written authorization to exercise discretion. Additionally, Court's member firm did not accept any of the customers' accounts as discretionary.

No monetary sanction was imposed due to Court's financial status.

Discretionary trading authority allows a broker to make trading decisions without consulting the customer before each trade. Because this grants significant control over customer assets, securities regulations require both written customer consent and firm acceptance of the account as discretionary.

Even when customers verbally agree to discretionary trading or are aware trades are being made, the lack of written authorization violates securities rules. The written authorization requirement exists to ensure customers have deliberately agreed to grant discretionary authority and understand what they are agreeing to.

From the broker's perspective, discretionary authority without proper documentation also creates risk. Without written authorization, there is no clear record of what the customer agreed to, which can lead to disputes about whether trades were authorized.

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

Investors should understand whether their accounts are discretionary or non-discretionary. If you want your broker to make trading decisions without consulting you each time, ensure this arrangement is properly documented. If you have a non-discretionary account, your broker should contact you before each trade.

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According to FINRA, Tejinder Singh of Half Moon Bay, California was named as a respondent in a FINRA complaint alleging that he refused to provide documents and appear for testimony during an investigation into whether he made material misrepresentations to obtain a Paycheck Protection Program (PPP)...

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According to FINRA, Tejinder Singh of Half Moon Bay, California was named as a respondent in a FINRA complaint alleging that he refused to provide documents and appear for testimony during an investigation into whether he made material misrepresentations to obtain a Paycheck Protection Program (PPP) loan.

This is a complaint—an allegation—and no findings have been made. Singh is presumed innocent unless the charges are proven.

The complaint alleges that Singh obtained a $38,541 PPP loan on behalf of a company, with the loan proceeds passing through his member firm. Singh provided a declaration to FINRA stating the loan was to pay payroll costs (the cost of his services), health care benefits, and rent.

However, the complaint alleges this declaration was inconsistent with public records indicating the PPP loan was obtained to retain three jobs—suggesting the loan may have been obtained under false pretenses.

FINRA sought bank and brokerage account statements and tax returns to investigate whether Singh made misrepresentations in applying for the PPP loan and whether he timely disclosed the company as an outside business activity on his Form U4. Singh allegedly failed to produce these documents or appear for testimony.

The PPP was a federal program designed to help businesses retain employees during the COVID-19 pandemic. Obtaining PPP funds through misrepresentation constitutes fraud against the federal government.

For investors, this case demonstrates that FINRA investigates a broad range of potential misconduct by registered persons, including conduct that may constitute fraud in other contexts. The charges are allegations that have not been proven.

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According to FINRA, several firms were suspended from FINRA membership pursuant to FINRA Rule 9552 for failing to provide information or keep information current:

ESF Equity, LP of San Clemente, California was suspended effective May 12, 2025.

First Commonwealth Securities Corporation of Atlan...

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According to FINRA, several firms were suspended from FINRA membership pursuant to FINRA Rule 9552 for failing to provide information or keep information current:

ESF Equity, LP of San Clemente, California was suspended effective May 12, 2025.

First Commonwealth Securities Corporation of Atlanta, Georgia was suspended effective May 12, 2025.

Mercury Capital Advisors, LLC of New York, New York was suspended effective May 5, 2025.

Realblocks Private Securities, Inc. of New York, New York was suspended under multiple proceedings beginning in March 2025, with all suspensions lifted on May 23, 2025.

Third500, LLC of Wilmette, Illinois was suspended effective May 27, 2025.

Additionally, EKATS Securities Inc. dba SBC Partners of New York was suspended effective May 29, 2025, pursuant to FINRA Rule 9555 for failure to meet eligibility or qualification standards.

A FINRA Rule 9552 suspension takes effect when a firm fails to provide requested information or documents, or fails to maintain current registration information. The suspension continues until compliance is achieved.

For customers of any of these firms, suspensions mean the firm cannot conduct securities business on your behalf. You should verify the status of your accounts, determine whether you can access your assets, and consider whether you need to transfer to another broker-dealer.

The lifting of suspensions (as occurred with Realblocks Private Securities) indicates the firm came into compliance with FINRA's requirements.

Investors can verify any firm's current status and regulatory history through FINRA BrokerCheck at brokercheck.finra.org. Monitoring your broker-dealer's regulatory status can provide early warning of potential problems.

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