Bad Brokers

According to FINRA, Donald Franklin Spivey of Camden, South Carolina was barred from association with any FINRA member firm in all capacities for refusing to appear for on-the-record testimony.

FINRA was investigating whether certain recommendations Spivey made were suitable for or in the best in...

Read More

According to FINRA, Donald Franklin Spivey of Camden, South Carolina was barred from association with any FINRA member firm in all capacities for refusing to appear for on-the-record testimony.

FINRA was investigating whether certain recommendations Spivey made were suitable for or in the best interests of retail customers. This type of investigation goes to the heart of a registered representative's obligations—ensuring that investment recommendations align with customers' needs, objectives, and circumstances.

Regulation Best Interest (Reg BI) requires broker-dealers and their representatives to act in customers' best interests when making recommendations. Suitability rules similarly require that recommendations be appropriate for each customer's investment profile.

Spivey initially cooperated with FINRA's investigation but ceased doing so. When he refused to appear for testimony, FINRA imposed a bar.

The decision to stop cooperating with an investigation often raises questions. FINRA's investigation was specifically examining whether Spivey's recommendations served his customers' interests—a fundamental question about whether he fulfilled his professional obligations.

By refusing testimony, Spivey prevented FINRA from completing its investigation. The bar ensures that he cannot continue working in an industry where he has demonstrated unwillingness to be accountable for his conduct.

This case underscores the importance of the best interest standard. Investors rely on financial professionals to recommend investments that serve their goals, not the representative's compensation interests. When regulators investigate whether this standard was met, cooperation is essential.

Investors should ensure they understand why specific investments are being recommended and how those recommendations align with their stated objectives. If recommendations seem inconsistent with your goals, ask questions.

Show Less

According to FINRA, Meredith Archer Webber of Cobleskill, New York was barred from association with any FINRA member firm in any capacity for failing to provide documents, information, and testimony in connection with FINRA's investigation.

FINRA was investigating whether Webber misappropriated f...

Read More

According to FINRA, Meredith Archer Webber of Cobleskill, New York was barred from association with any FINRA member firm in any capacity for failing to provide documents, information, and testimony in connection with FINRA's investigation.

FINRA was investigating whether Webber misappropriated funds from two elderly customers—among the most serious allegations that can be made against a financial professional. Elder financial exploitation is a growing concern in the securities industry, and regulators prioritize investigations involving potential harm to vulnerable investors.

FINRA specifically noted that the requested documents, information, and testimony were material to its investigation because they directly related to whether Webber misappropriated funds. These materials were necessary for FINRA to complete its investigation.

Webber's failure to cooperate impeded FINRA's investigation into her potential misconduct. Without the requested documents and testimony, FINRA could not determine what actually occurred with respect to the elderly customers' funds.

As a result, FINRA imposed a bar. Webber cannot associate with any FINRA member firm in any capacity, permanently ending her ability to work in the securities industry.

It is important to note that the bar was based on Webber's failure to cooperate, not on a finding that she misappropriated customer funds. However, her refusal to participate in the investigation prevented any such determination.

This case highlights the vulnerability of elderly investors. Seniors may place significant trust in financial professionals and can be targets for exploitation. Family members and caregivers should remain vigilant about elderly relatives' financial accounts.

If you suspect elder financial exploitation, contact the broker-dealer, FINRA, and adult protective services in your state.

Show Less

According to FINRA, Devin Lamarr Wicker of New York, New York was barred from association with any FINRA member firm in all capacities and ordered to pay $50,000 plus interest in restitution to a customer for converting customer funds.

The U.S. Court of Appeals for the District of Columbia Circui...

Read More

According to FINRA, Devin Lamarr Wicker of New York, New York was barred from association with any FINRA member firm in all capacities and ordered to pay $50,000 plus interest in restitution to a customer for converting customer funds.

The U.S. Court of Appeals for the District of Columbia Circuit dismissed Wicker's appeal of an SEC decision that had sustained the FINRA findings and sanctions.

The case involved a customer who hired Wicker's member firm to serve as the underwriter for an anticipated public offering. The customer transferred $50,000 to the firm for the sole purpose of paying a retainer to a law firm that would assist with the offering.

Instead of using the funds as intended, Wicker used the money for other purposes. He never paid the law firm and never returned the funds to the customer, despite receiving at least seven written requests from both the customer and the law firm to do so.

The findings revealed that after the customer wired the $50,000 to the firm's bank account, essentially all of the account's funds were used to pay the firm's other expenses. Approximately $440,500 was also transferred to Wicker's personal bank account. Wicker controlled the firm's bank account and authorized these withdrawals and payments, including substantial payments to himself.

To date, Wicker has not repaid the customer or sent the money to the law firm.

This case represents clear conversion—the unauthorized use of customer funds for purposes other than what the customer intended. Such conduct fundamentally breaches the trust customers place in financial professionals.

Investors should carefully monitor any funds transferred to broker-dealers and promptly follow up if directed payments are not made as agreed.

Show Less

According to FINRA, Brian Richard Baine of Rye, New York was assessed a deferred fine of $5,000 and suspended from association with any FINRA member firm in all capacities for three months for signing or causing a third party to sign customer signatures on insurance-related documents without permiss...

Read More

According to FINRA, Brian Richard Baine of Rye, New York was assessed a deferred fine of $5,000 and suspended from association with any FINRA member firm in all capacities for three months for signing or causing a third party to sign customer signatures on insurance-related documents without permission.

The customers whose signatures were signed included senior customers, who are considered particularly vulnerable in regulatory contexts.

FINRA noted that Baine engaged in this conduct to expedite the insurance application process and not in furtherance of other misconduct. The underlying transactions were authorized by the customers, and none of them complained about Baine's actions.

While this context may explain Baine's motivations, it does not excuse the conduct. Signing a customer's name without explicit permission—even on documents for transactions the customer has approved—violates fundamental principles of documentation integrity.

Proper documentation protects both customers and firms. When signatures are forged or applied without authorization, it becomes difficult to verify what customers actually agreed to. This can create disputes and undermine trust in the documentation process.

The three-month suspension, running from July 7, 2025 through October 6, 2025, reflects the seriousness of unauthorized signatures while acknowledging that no customers were harmed and no fraudulent intent was present.

For investors, this case serves as a reminder to review all documents carefully before and after signing. If you discover that your signature appears on documents you did not sign, report it to your broker-dealer's compliance department immediately.

Financial professionals should never sign customer names or authorize others to do so, regardless of time pressures or customer convenience. Proper documentation procedures exist for important reasons.

Show Less

According to FINRA, Michael Ciro Colletti of Glen Head, New York was fined $10,000, suspended from association with any FINRA member firm in all capacities for eight months, ordered to pay $5,417 plus interest in restitution to a customer, and required to requalify by examination before serving as a...

Read More

According to FINRA, Michael Ciro Colletti of Glen Head, New York was fined $10,000, suspended from association with any FINRA member firm in all capacities for eight months, ordered to pay $5,417 plus interest in restitution to a customer, and required to requalify by examination before serving as a General Securities Representative.

Colletti appealed the NAC decision to the SEC. The sanctions are not in effect pending that review.

FINRA found that Colletti executed unauthorized trades in a customer's account and engaged in quantitatively unsuitable trading. The findings revealed that Colletti selected which securities to trade and determined the volume and frequency of trading in the customer's account, thereby exercising de facto control over the account.

The customer was in his 60s when he opened the account, was nearing retirement, and the account was an individual retirement account (IRA). He listed his risk tolerance as moderate and his objectives as income and growth—a profile inconsistent with active trading.

Despite this conservative profile, Colletti engaged in a pattern of buying stocks, holding them briefly, and selling them to buy other stocks that were also quickly sold. This pattern continued until the customer closed his account.

The trading resulted in losses of $5,417 for the customer while generating $5,081 in commissions for Colletti. When commissions approach or exceed customer losses, it raises serious questions about whether the trading served the customer's interests or the representative's.

Quantitatively unsuitable trading—also known as churning or excessive trading—occurs when trading frequency and volume are inconsistent with the customer's investment profile and primarily benefit the representative through commissions.

Investors should monitor their accounts for excessive trading and ensure activity aligns with their stated objectives.

Show Less

According to FINRA, Christopher A. Matuch of Spring Lake, New Jersey was fined $5,000 and suspended from association with any FINRA member firm in all capacities for four months for mismarking trading positions.

Matuch inaccurately marked the value of six positions in his trading book, thereby co...

Read More

According to FINRA, Christopher A. Matuch of Spring Lake, New Jersey was fined $5,000 and suspended from association with any FINRA member firm in all capacities for four months for mismarking trading positions.

Matuch inaccurately marked the value of six positions in his trading book, thereby concealing over $15 million in unrealized losses from his member firm.

Accurate position marking is fundamental to risk management and financial reporting. Firms rely on accurate marks to understand their exposure and make informed decisions. When traders mismark positions, they distort the firm's understanding of its financial condition.

FINRA found that Matuch mismarked the positions to make them appear more profitable than they actually were. This deception continued until Matuch himself informed his supervisor of the full scope of his mismarking and the resulting unrealized losses.

While Matuch's eventual disclosure may have been a mitigating factor, the conduct itself was serious. Concealing $15 million in losses represents a significant distortion of the firm's financial position.

The four-month suspension runs from August 4, 2025 through December 3, 2025.

This case illustrates the importance of accurate reporting in trading operations. Mismarking positions can mask significant risks until they become unmanageable, potentially harming the firm, its customers, and the broader market.

For investors, this case demonstrates that misconduct in the securities industry is not limited to customer-facing activities. Internal controls and accurate reporting are essential to maintaining market integrity. Firms must have robust systems to verify position marks and detect potential manipulation.

Show Less

According to FINRA, Daniel Michael Roper of Omaha, Nebraska was assessed a deferred fine of $15,000, suspended from association with any FINRA member firm in all capacities for two years, ordered to pay deferred disgorgement of $80,747 plus interest in unlawful profits, and required to requalify by ...

Read More

According to FINRA, Daniel Michael Roper of Omaha, Nebraska was assessed a deferred fine of $15,000, suspended from association with any FINRA member firm in all capacities for two years, ordered to pay deferred disgorgement of $80,747 plus interest in unlawful profits, and required to requalify by examination before reassociating with any FINRA member.

Roper entered more than 14,000 equity trades and 6,300 options trades in a customer's self-directed retail account in exchange for a share of the customer's profits. This profit-sharing arrangement was not disclosed to his member firm, and the firm did not authorize it.

Roper received $80,747 in profit-sharing payments from the customer. To conceal the arrangement, he took numerous steps to hide his conduct from his firm.

Additionally, Roper exercised discretion in the customer's account without prior written authorization. While the customer orally authorized Roper to exercise discretion, written authorization is required. The firm never accepted the account as discretionary.

Roper compounded these violations by falsely attesting in annual compliance questionnaires that his disclosures were complete and accurate, even though he did not disclose the discretionary account.

Furthermore, Roper exchanged thousands of text messages and emails with the customer using his personal mobile device, discussing account performance, trades, and profit-sharing payments. These communications were not provided to his firm, causing incomplete business records.

The two-year suspension runs from July 21, 2025 through July 20, 2027.

This case demonstrates multiple compliance failures: undisclosed compensation arrangements, unauthorized discretion, false attestations, and off-channel communications. Each violation independently warranted sanctions; together, they justified a lengthy suspension.

Show Less

According to FINRA, Chad Michael Rogers of Tuttle, Oklahoma was assessed a deferred fine of $5,000 and suspended from association with any FINRA member firm in all capacities for 45 days for impersonating customers during phone calls.

Rogers impersonated customers during calls to his prior member...

Read More

According to FINRA, Chad Michael Rogers of Tuttle, Oklahoma was assessed a deferred fine of $5,000 and suspended from association with any FINRA member firm in all capacities for 45 days for impersonating customers during phone calls.

Rogers impersonated customers during calls to his prior member firm to facilitate the transfer of their accounts to his new employer or, in some instances, to transfer funds to the customers' bank accounts.

FINRA noted that while the customers consented to transferring their accounts or funds, none of them gave Rogers permission to impersonate them during these calls.

Customer consent to a transaction does not authorize a representative to assume their identity. Impersonation undermines the verification processes firms use to confirm that requests are legitimate. These processes exist to protect customers from unauthorized transactions.

When representatives impersonate customers, they circumvent important safeguards. Even when the underlying transaction is authorized, the method is improper and potentially fraudulent.

The 45-day suspension runs from August 4, 2025 through September 17, 2025.

The relatively brief suspension reflects that the underlying transactions were authorized and no customers were harmed. However, the conduct itself—impersonating customers to circumvent verification procedures—is serious misconduct that firms and regulators cannot tolerate.

For investors, this case highlights the importance of identity verification procedures. When firms ask verification questions during phone calls, they are protecting your account from unauthorized access. These procedures should never be bypassed, even for legitimate transactions.

If you want to authorize a representative to act on your behalf, work with your firm to establish proper authorization procedures rather than allowing impersonation.

Show Less

According to FINRA, Andrew Steven Mack of New York, New York was assessed a deferred fine of $10,000 and suspended from association with any FINRA member firm in all capacities for three months for exercising discretion without written authorization in customer accounts.

FINRA rules require writt...

Read More

According to FINRA, Andrew Steven Mack of New York, New York was assessed a deferred fine of $10,000 and suspended from association with any FINRA member firm in all capacities for three months for exercising discretion without written authorization in customer accounts.

FINRA rules require written authorization before a representative can exercise discretion—the authority to make trading decisions without obtaining specific approval for each transaction. This requirement protects customers by ensuring clear documentation of any delegation of trading authority.

FINRA found that while Mack's customers understood he was conducting trading in their accounts, none had given him prior written authorization, and his member firm had not accepted the accounts as discretionary.

The violations were compounded by the fact that for six months during the relevant period, Mack was on a heightened supervision plan that specifically prohibited him from exercising discretion. Despite this explicit prohibition, he continued placing discretionary trades without written authorization.

Furthermore, Mack inaccurately stated on three annual compliance questionnaires that he did not exercise discretion in customer accounts.

The three-month suspension runs from August 4, 2025 through November 3, 2025.

This case illustrates multiple failures: exercising discretion without written authorization, violating heightened supervision requirements, and making false statements on compliance questionnaires. The pattern suggests a disregard for compliance requirements designed to protect both customers and the firm.

Investors who wish to grant discretionary authority to a representative should ensure proper written authorization is in place. Review your account agreements to understand what authority you have granted and maintain records of any discretionary authorization you provide.

Show Less

According to FINRA, Francis Gerard Smith of Saint James, New York was fined $5,000 and suspended from association with any FINRA member firm in all capacities for one month for falsely certifying completion of continuing education requirements.

Smith certified to the State of New York that he had...

Read More

According to FINRA, Francis Gerard Smith of Saint James, New York was fined $5,000 and suspended from association with any FINRA member firm in all capacities for one month for falsely certifying completion of continuing education requirements.

Smith certified to the State of New York that he had personally completed the continuing education required to renew his state insurance license. In fact, another person had completed that continuing education on his behalf.

Continuing education requirements exist to ensure that licensed professionals maintain current knowledge of products, regulations, and ethical obligations. When someone else completes CE courses, the professional does not receive the intended educational benefit.

False certification to state regulators is a serious matter. It involves both deception of regulatory authorities and circumvention of professional development requirements designed to protect consumers.

The one-month suspension runs from August 18, 2025 through September 17, 2025.

While this case involved insurance-related CE rather than securities CE, FINRA has jurisdiction over associated persons' conduct that may reflect on their fitness to work in the securities industry. False statements to any regulator raise questions about integrity and trustworthiness.

This case is similar to other recent actions involving CE fraud, suggesting that having others complete CE requirements is a known problem in the industry.

For consumers, this case underscores that regulatory certifications and licenses have meaning. When professionals take shortcuts around educational requirements, they may not have the knowledge needed to serve clients properly. Investors can verify their financial professionals' credentials and disciplinary history through FINRA BrokerCheck and state regulatory databases.

Show Less