Bad Brokers

According to FINRA, Kevin Tong You was suspended from association with any FINRA member firm pursuant to FINRA Rule 9552(d) for failure to provide information or keep information current.

The suspension became effective on August 8, 2025. As of the report date, the suspension had not been lifted....

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According to FINRA, Kevin Tong You was suspended from association with any FINRA member firm pursuant to FINRA Rule 9552(d) for failure to provide information or keep information current.

The suspension became effective on August 8, 2025. As of the report date, the suspension had not been lifted.

The underlying matter is documented in FINRA Case #2024083676601.

You was located in Corona, California. The suspension bars him from associating with any FINRA member firm until he provides the requested information.

Under FINRA rules, registered persons must cooperate with information requests. This obligation continues even after an individual leaves the securities industry, as long as the request relates to conduct during the period of registration.

Failure to provide information often raises concerns about what the individual may be hiding. FINRA information requests typically relate to investigations into potential rule violations, customer complaints, or other regulatory matters.

For investors, this suspension means You cannot conduct securities activities. If You was your registered representative, ensure your firm has assigned someone else to service your accounts.

If the suspension continues for three months, it may convert to a permanent bar. Monitor the status of this matter and consider consulting with a securities attorney if you have concerns about your accounts or investments involving You.

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According to FINRA, Robert George Gorham was suspended from association with any FINRA member firm pursuant to FINRA Rule Series 9554 for failure to comply with an arbitration award or related settlement.

The suspension became effective on August 6, 2025. As of the report date, the suspension had...

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According to FINRA, Robert George Gorham was suspended from association with any FINRA member firm pursuant to FINRA Rule Series 9554 for failure to comply with an arbitration award or related settlement.

The suspension became effective on August 6, 2025. As of the report date, the suspension had not been lifted.

The underlying arbitration is FINRA Arbitration Case #25-00270.

FINRA Rule Series 9554 allows FINRA to suspend or bar individuals who fail to pay arbitration awards or settlements. This enforcement mechanism ensures that arbitration awards have real consequences and that harmed investors actually receive the compensation to which they are entitled.

When a registered representative loses an arbitration or enters a settlement agreement and then fails to pay, FINRA will suspend them from the industry. This suspension remains in effect until the award is paid or the individual is otherwise released from the obligation.

For the investor who won the arbitration award, this suspension provides leverage but does not guarantee payment. Suspended individuals cannot work in the securities industry, which creates financial pressure to satisfy the award.

For other investors, this action provides important information. Individuals who fail to pay arbitration awards may have financial difficulties or may demonstrate a disregard for their obligations. Check BrokerCheck before working with any financial professional to review their complete regulatory history, including arbitration awards.

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According to FINRA, Cynthia Lynn Wadkinson was suspended from association with any FINRA member firm pursuant to FINRA Rule Series 9554 for failure to comply with an arbitration award or related settlement.

Notably, the suspension was in effect for an extended period from April 26, 2016, through ...

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According to FINRA, Cynthia Lynn Wadkinson was suspended from association with any FINRA member firm pursuant to FINRA Rule Series 9554 for failure to comply with an arbitration award or related settlement.

Notably, the suspension was in effect for an extended period from April 26, 2016, through August 27, 2025, when it was finally lifted. This nine-year suspension indicates a prolonged failure to satisfy the arbitration award.

The underlying arbitration is FINRA Arbitration Case #15-01806.

The length of this suspension is unusual and suggests either an inability or unwillingness to pay the arbitration award for nearly a decade. During this entire period, Wadkinson could not associate with any FINRA member firm in any capacity.

The lifting of the suspension indicates that Wadkinson either paid the award, reached a settlement with the claimant, or was otherwise released from the obligation.

For the investor who won the arbitration in 2015, this lengthy period without payment represents a significant delay in receiving compensation for their harm.

This case illustrates a limitation of the arbitration process. While FINRA can suspend individuals who fail to pay awards, it cannot force payment. Individuals who lack assets or are willing to forgo working in the securities industry may leave arbitration awards unpaid for extended periods.

Investors should understand that winning an arbitration award does not guarantee collection, particularly against individuals rather than firms.

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According to FINRA, Isaak Bond Investments, Inc., a Lakewood, Colorado-based broker-dealer, was censured and fined $20,000 for conducting a securities business while failing to maintain minimum required net capital.

The firm's violations stemmed from its handling of municipal securities transacti...

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According to FINRA, Isaak Bond Investments, Inc., a Lakewood, Colorado-based broker-dealer, was censured and fined $20,000 for conducting a securities business while failing to maintain minimum required net capital.

The firm's violations stemmed from its handling of municipal securities transactions with another entity. While trading these securities, Isaak Bond sold them to the market and assumed all gains and losses. However, the firm incorrectly believed that because the securities were legally owned by the other entity through a contract, they did not need to be included in its inventory calculations.

This misunderstanding had significant consequences. By failing to treat these securities as part of its inventory, the firm did not take the required haircuts in its net capital computations. Haircuts are regulatory deductions that firms must apply to securities positions to account for potential market volatility and ensure adequate capital reserves.

The violations extended beyond net capital calculations. FINRA found that the firm failed to make and preserve accurate records, filed inaccurate FOCUS (Financial and Operational Combined Uniform Single) reports for 23 consecutive months between January 2022 and November 2023, and failed to file timely financial deficiency notices with FINRA and the SEC.

When the firm discovered its net capital deficiency on October 22, 2024, it was required to file same-day notification with regulators. Instead, the firm delayed filing until November 27, 2024—more than a month late.

Additionally, the firm failed to conduct an annual independent test of its anti-money laundering compliance program, a fundamental requirement for all broker-dealers.

For investors, this case highlights the importance of working with financially sound broker-dealers. Net capital requirements exist to ensure firms can meet their obligations to customers. When firms fail to maintain adequate capital or keep accurate records, it raises questions about their operational integrity and ability to protect customer assets.

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According to FINRA, Cantor Fitzgerald & Co., a New York-based broker-dealer, was censured and fined $225,000 (with $73,000 payable to FINRA) for filing untimely and inaccurate notifications in connection with securities distributions subject to Regulation M.

Regulation M is designed to prevent ma...

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According to FINRA, Cantor Fitzgerald & Co., a New York-based broker-dealer, was censured and fined $225,000 (with $73,000 payable to FINRA) for filing untimely and inaccurate notifications in connection with securities distributions subject to Regulation M.

Regulation M is designed to prevent manipulation during securities offerings by requiring firms to notify regulators about their participation in distributions. These notifications help ensure market integrity during sensitive offering periods.

The firm's violations were extensive. FINRA found that Cantor Fitzgerald submitted untimely restricted period notifications, with delays ranging from one to five days in most cases. However, some filings were significantly more delayed—one notification was 55 days late, and another was a staggering 1,068 days late.

Beyond timing issues, the firm also submitted inaccurate notifications. When new distribution participants joined offerings after initial notifications were filed, the firm failed to amend its filings. Instead, the firm only provided complete participant lists in its trading notifications, which violated the requirement for accurate restricted period notifications.

Trading notifications were similarly problematic, with submissions ranging from one to 55 days late and failing to identify all distribution participants.

Perhaps most concerning, FINRA found that Cantor Fitzgerald failed to establish and maintain a supervisory system reasonably designed to ensure compliance with Regulation M notification requirements. The firm's written supervisory procedures did not describe how to review notifications for timeliness or accuracy, and no reviews were actually conducted.

Following the investigation, the firm implemented a new process to review Regulation M-related notifications and amend restricted period notifications when necessary.

This case serves as a reminder that compliance with regulatory notification requirements is not optional. Firms must have robust supervisory systems in place to ensure timely and accurate filings, particularly during securities offerings where market manipulation concerns are heightened.

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According to FINRA, Investment Placement Group, a San Diego, California-based broker-dealer, was censured and fined $100,000 for failing to reasonably supervise the use of an approved electronic instant messaging platform and failing to preserve and review business-related communications.

In toda...

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According to FINRA, Investment Placement Group, a San Diego, California-based broker-dealer, was censured and fined $100,000 for failing to reasonably supervise the use of an approved electronic instant messaging platform and failing to preserve and review business-related communications.

In today's digital environment, broker-dealers must capture and retain all business-related electronic communications. This requirement exists to protect investors and enable regulatory oversight of securities industry communications.

Investment Placement Group engaged a third-party vendor to capture messages sent and received by its employees through an approved messaging platform. However, FINRA found that the firm did not take reasonable steps to verify that employee devices were actually connected to the archiving service, or that they remained connected over time.

The firm's written supervisory procedures compounded the problem by failing to address the messaging platform's use or describe how supervisors should verify that devices were properly connected to the archiving service.

The consequences were significant. Firm employees who were authorized to use the messaging platform either were never connected to the archiving service or were only connected for portions of the time. When FINRA requested messages in connection with a customer complaint review, the firm was unable to produce all responsive communications.

This failure to preserve business records is particularly concerning because customer complaints often involve disputes about what was communicated between representatives and clients. Without complete message archives, firms cannot adequately respond to complaints or regulatory inquiries.

The firm has since stopped permitting employees to use the problematic messaging platform and approved a new platform that enables message preservation and review without requiring a separate vendor.

For investors, this case underscores the importance of firms maintaining complete records of communications. If you have concerns about interactions with a financial professional, document conversations independently when possible.

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According to FINRA, J.P. Morgan Securities LLC was censured, fined $350,000, ordered to pay $157,504.96 plus interest in restitution to customers, and ordered to pay disgorgement of $1,672,923 plus interest in commissions for failing to establish adequate supervisory systems for short-term trades of...

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According to FINRA, J.P. Morgan Securities LLC was censured, fined $350,000, ordered to pay $157,504.96 plus interest in restitution to customers, and ordered to pay disgorgement of $1,672,923 plus interest in commissions for failing to establish adequate supervisory systems for short-term trades of syndicate preferred stocks.

Syndicate preferred stocks are securities sold in initial offerings where broker-dealers earn selling concessions from issuers. Short-term trading of these securities—buying and quickly selling—can result in losses for customers while generating commissions for the firm.

FINRA found that J.P. Morgan failed to implement reasonable supervision over recommendations of short-term syndicate preferred stock trades to retail customers. While the firm used electronic alerts to flag potentially unsuitable trading based on account-wide metrics like cost-to-equity ratios and turnover rates, these alerts did not specifically monitor syndicate preferred stock activity.

The firm had no alerts that flagged when syndicate preferred stock was sold within a short period after purchase. As a result, most customers' short-term trades in preferred stock went unreviewed by supervisors.

The impact on customers was substantial. At least 15 of the firm's representatives or representative teams recommended over 1,000 syndicate preferred stock purchases that were subsequently sold on a short-term basis, resulting in realized losses for customers even after accounting for income earned on the positions.

While customers lost money, the firm collected approximately $1.67 million in selling concessions from issuers and approximately $157,000 in sales commissions from customers on these transactions.

J.P. Morgan has since implemented a new trade review process and enhanced written procedures specific to syndicate preferred stocks to provide supervisory review of short-term trades.

This case illustrates why supervision matters. Without product-specific monitoring, unsuitable trading patterns can go undetected, potentially harming customers while generating revenue for the firm and its representatives.

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According to FINRA, First Southern, LLC, a Guaynabo, Puerto Rico-based broker-dealer, was censured and fined $250,000 for multiple compliance failures, including inadequate policies for Regulation Best Interest (Reg BI) and inaccurate net capital records.

Reg BI requires broker-dealers to act in ...

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According to FINRA, First Southern, LLC, a Guaynabo, Puerto Rico-based broker-dealer, was censured and fined $250,000 for multiple compliance failures, including inadequate policies for Regulation Best Interest (Reg BI) and inaccurate net capital records.

Reg BI requires broker-dealers to act in the best interest of retail customers when making securities recommendations. FINRA found that while First Southern's written supervisory procedures addressed Reg BI in general terms, they largely restated the rule without providing reasonable procedures to prevent, detect, or correct violations—particularly regarding the firm's municipal securities activities.

The firm also maintained inaccurate books and records related to its net capital calculations. When participating in firm commitment municipal securities offerings, First Southern used a blanket seven percent haircut instead of applying the correct maturity-specific and CUSIP-specific haircuts required by regulation.

This miscalculation meant the firm inaccurately determined its open contractual commitment charges. Since January 2020, the firm's general ledger, net capital computations, and at least 29 FOCUS reports understated the firm's actual excess net capital.

The firm's supervisory procedures did not address how to properly account for open contractual commitments in municipal securities offerings or provide guidance on applying correct haircuts.

FINRA also found that First Southern failed to timely report accurate information to the Real-time Transaction Reporting System (RTRS) for municipal securities transactions. The firm's practice of bulk reporting transactions at market close resulted in customer trades being reported more than fifteen minutes after corresponding dealer trades.

The firm had no supervisory process to review reporting accuracy and did not designate anyone responsible for timely RTRS reporting.

This case demonstrates how multiple compliance failures can compound. Firms must have specific, actionable procedures—not just rule restatements—to ensure compliance with investor protection requirements.

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According to FINRA, Integral Wealth Securities LLC (formerly known as Amera Securities LLC), a New York-based broker-dealer, was censured and fined $20,000 for failing to timely file offering documents related to 18 private placements.

FINRA rules require firms to file private placement offering ...

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According to FINRA, Integral Wealth Securities LLC (formerly known as Amera Securities LLC), a New York-based broker-dealer, was censured and fined $20,000 for failing to timely file offering documents related to 18 private placements.

FINRA rules require firms to file private placement offering documents within 15 calendar days of the date of first sale. These filing requirements help regulators monitor private securities offerings and protect investors.

Integral Wealth Securities consistently missed these deadlines. Instead of filing within 15 days as required, the firm submitted filings between 14 days and 1,020 days late. Notably, twelve of these filings were made more than one year after they were due.

A filing that is over 1,000 days late—nearly three years—represents a significant compliance breakdown. Private placement filings serve important regulatory purposes, allowing FINRA to review offering materials and identify potential concerns.

When firms fail to make timely filings, regulators lose visibility into private securities offerings during critical periods. This can delay the identification of problematic offerings or fraudulent schemes.

For investors considering private placements, this case serves as a reminder that these investments involve additional risks beyond market risk. Private placements are not registered with the SEC and have limited regulatory oversight compared to publicly traded securities.

Before investing in any private placement, investors should carefully review all offering documents, understand the risks involved, and verify that the broker-dealer and registered representative are properly licensed. Investors can check registration status and disciplinary history through FINRA BrokerCheck.

While the violations in this case involved procedural filing requirements rather than investor harm, timely compliance with regulatory requirements is a baseline expectation for all broker-dealers.

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According to FINRA, Greenbird Capital, LLC, a Boca Raton, Florida-based broker-dealer, was censured and fined $50,000 for lacking reasonable systems to supervise private placement solicitations and for failing to comply with telemarketing rules.

Private placements sold under Rule 506(b) of Regula...

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According to FINRA, Greenbird Capital, LLC, a Boca Raton, Florida-based broker-dealer, was censured and fined $50,000 for lacking reasonable systems to supervise private placement solicitations and for failing to comply with telemarketing rules.

Private placements sold under Rule 506(b) of Regulation D generally prohibit general solicitation—meaning firms cannot advertise these offerings to the public. Instead, firms must have pre-existing, substantive relationships with prospective investors before soliciting them.

FINRA found that Greenbird Capital's written procedures did not prohibit general solicitation of private placement offerings and provided no guidance on what constitutes a pre-existing, substantive relationship. The firm had no system to document when it established substantive relationships with prospective investors or to confirm such relationships existed before solicitation.

The result was significant: registered representatives made hundreds of thousands of calls to prospective investors without a reasonable system to ensure substantive relationships were established beforehand.

The firm also failed to comply with FINRA's telemarketing rules. Greenbird Capital had no system to monitor outbound calls against the national do-not-call list. While a principal occasionally checked whether representatives called customers during permitted hours, the firm did not specify when or how often such reviews should occur.

Following the investigation, Greenbird Capital implemented a pre-existing relationship form, revised its written supervisory procedures, and stopped engaging in cold calling.

This case highlights important investor protections. The prohibition on general solicitation for certain private placements exists because these securities are not registered and carry significant risks. The requirement for pre-existing relationships helps ensure that only investors with whom the firm has meaningful connections are offered these investments.

If you receive unsolicited calls offering private investment opportunities, exercise caution and verify the caller's credentials through FINRA BrokerCheck.

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