Bad Brokers

According to FINRA, Michael Darin Dunlap (CRD #3029958), a former registered representative based in Katy, Texas, was barred from association with any FINRA member firm in all capacities. The bar was issued on August 12, 2024, through an Acceptance, Waiver, and Consent (AWC) agreement under FINRA Ca...

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According to FINRA, Michael Darin Dunlap (CRD #3029958), a former registered representative based in Katy, Texas, was barred from association with any FINRA member firm in all capacities. The bar was issued on August 12, 2024, through an Acceptance, Waiver, and Consent (AWC) agreement under FINRA Case #2022076685501.

Dunlap was found in violation of FINRA rules after he converted approximately $9,000 from his member firm's parent company. Unlike many barring actions that stem from a refusal to cooperate with an investigation, Dunlap's case involved findings of actual substantive misconduct, specifically the misappropriation of funds.

The findings revealed that while Dunlap was associated with his FINRA member firm, he also worked for the firm's parent company, which was a fraternal financial organization structured into chapters. Dunlap served as the chapter leader for three separate chapters within this organization. In his role as chapter leader, the parent company issued debit cards to Dunlap that were linked to each chapter's respective bank accounts. These debit cards were intended for legitimate chapter business expenses only.

However, Dunlap abused his position of trust by converting approximately $9,000 of chapter funds for his personal use. He accomplished this through two methods: charging personal expenses to the chapter debit cards and withdrawing funds directly from chapter bank accounts. In both instances, these transactions were made without the parent company's authorization. This conduct constitutes conversion, which is the unauthorized taking and use of another party's funds or property for one's own benefit.

Conversion is one of the most serious violations in the securities industry. FINRA Rule 2150 specifically prohibits associated persons from making improper use of customer or firm funds or securities. Even though the funds in this case belonged to the parent company's fraternal chapters rather than individual investor accounts, the principle remains the same: registered representatives hold a position of trust and are expected to handle all funds with the utmost integrity.

Without admitting or denying the findings, Dunlap consented to the sanction and the entry of findings against him. As a result, he is permanently barred from working with any FINRA-registered broker-dealer.

This case illustrates an important lesson for investors. Misconduct by a financial professional is not always limited to investment accounts. When a broker demonstrates a willingness to misappropriate funds in any context, it raises serious questions about their overall integrity and trustworthiness. Investors should be diligent about monitoring their accounts and verifying that all transactions are authorized. FINRA's BrokerCheck tool allows investors to review the disciplinary history of any registered broker, which can help identify patterns of misconduct before entrusting someone with your financial assets.

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According to FINRA, Lawrence Roger Rice (CRD #375304), a former registered representative based in Wellington, Florida, was barred from association with any FINRA member firm in all capacities. The bar was issued on August 14, 2024, through an Acceptance, Waiver, and Consent (AWC) agreement under FI...

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According to FINRA, Lawrence Roger Rice (CRD #375304), a former registered representative based in Wellington, Florida, was barred from association with any FINRA member firm in all capacities. The bar was issued on August 14, 2024, through an Acceptance, Waiver, and Consent (AWC) agreement under FINRA Case #2024081415101.

Rice was found in violation of FINRA rules after he refused to provide documents and information requested by FINRA in connection with its investigation of allegations made in a Form U5 filing by his former member firm. The Form U5, formally known as the Uniform Termination Notice for Securities Industry Registration, is a mandatory regulatory filing that firms must submit when a registered representative departs. This document discloses the circumstances and reasons for the departure, and it becomes a permanent part of the individual's regulatory record accessible through FINRA BrokerCheck.

In Rice's case, the Form U5 alleged that he failed to timely disclose a pending civil action in which he was named. Registered representatives have an ongoing obligation to disclose certain personal legal matters to their employing firm and to regulators. This obligation exists under FINRA rules and the Uniform Registration Forms, including Form U4, which requires the disclosure of pending and concluded civil judicial actions, such as lawsuits. Timely disclosure of these matters allows firms to assess whether the legal issues could affect the representative's ability to serve customers or could pose reputational or financial risks to the firm.

Failure to disclose a pending civil action is a serious compliance matter. Firms rely on accurate and timely disclosures to fulfill their own supervisory and regulatory obligations. When a broker conceals legal matters, it deprives the firm and regulators of information that may be material to assessing that individual's fitness to serve in the securities industry.

When FINRA sought to investigate the allegations by requesting documents and information from Rice, he refused to cooperate. Under FINRA Rule 8210, all associated persons are required to provide information and documents when requested by FINRA in furtherance of its regulatory mission. Refusal to comply with a Rule 8210 request is an independent violation that typically results in the most severe sanction available, a permanent bar from the industry.

Without admitting or denying the findings, Rice consented to the sanction and the entry of findings against him. He is now permanently prohibited from associating with any FINRA-registered broker-dealer.

Investors should be aware that disclosure obligations exist to protect them. When brokers conceal legal issues, it may indicate broader problems with their integrity and trustworthiness. Investors can use FINRA's BrokerCheck to review disclosure events on a broker's record, including civil judicial actions, customer complaints, and regulatory actions. Reviewing these disclosures before selecting a financial professional is an important step in safeguarding your investments.

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According to FINRA, Christopher Reynolds (CRD #5976029), a former registered representative based in Monaca, Pennsylvania, was barred from association with any FINRA member firm in all capacities. The bar was issued on August 16, 2024, through an Acceptance, Waiver, and Consent (AWC) agreement under...

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According to FINRA, Christopher Reynolds (CRD #5976029), a former registered representative based in Monaca, Pennsylvania, was barred from association with any FINRA member firm in all capacities. The bar was issued on August 16, 2024, through an Acceptance, Waiver, and Consent (AWC) agreement under FINRA Case #2022076491301.

Reynolds was found in violation of multiple FINRA rules and federal regulations based on a pattern of serious misconduct. First, Reynolds caused his member firm to maintain inaccurate books and records by forging customer signatures. Without the customers' permission, Reynolds electronically or hand-signed customers' names on hard copy account documents. He also signed two customers' names on withdrawal forms without those customers' permission or authorization. Forging customer signatures on account documents is a grave violation that strikes at the heart of the trust relationship between a broker and their clients. It also undermines the integrity of a firm's books and records, which are essential for regulatory oversight and customer protection.

Second, Reynolds willfully violated Regulation Best Interest (Reg BI), the federal standard of conduct that requires broker-dealers and their representatives to act in the best interest of their retail customers when making investment recommendations. Reynolds recommended that customers make annuity withdrawals or surrenders and reinvest the proceeds in a registered index-linked annuity without having a reasonable basis to believe those transactions were in his customers' best interests. As a result of these unsuitable recommendations, Reynolds' customers incurred over $32,000 in surrender fees, in addition to adverse tax consequences. Annuity surrenders and exchanges can be particularly harmful to investors because early withdrawal penalties, surrender charges, and tax liabilities can significantly erode investment returns.

Third, Reynolds caused his firm to fail to retain required business communications by using his personal email account and personal cell phone to exchange securities-related communications with firm customers. FINRA member firms are required to capture and retain all business-related communications. When brokers use personal devices or accounts to conduct business, it circumvents these recordkeeping requirements and prevents the firm from supervising those communications.

Without admitting or denying the findings, Reynolds consented to the sanction and the entry of findings against him. He is now permanently barred from the securities industry.

This case is particularly instructive for investors because it illustrates how multiple forms of misconduct can intersect. Investors should never sign blank documents and should always verify that their signatures on account paperwork are genuine. If a broker recommends surrendering an annuity to purchase a new product, investors should carefully evaluate the costs, including surrender charges and potential tax consequences. FINRA's BrokerCheck is an essential resource for investigating a broker's disciplinary history before making investment decisions.

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According to FINRA, Gregory Alan Corrie (CRD #1982814), a former registered representative based in Meridian, Idaho, was barred from association with any FINRA member firm in all capacities. The bar was issued on August 20, 2024, through an Acceptance, Waiver, and Consent (AWC) agreement under FINRA...

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According to FINRA, Gregory Alan Corrie (CRD #1982814), a former registered representative based in Meridian, Idaho, was barred from association with any FINRA member firm in all capacities. The bar was issued on August 20, 2024, through an Acceptance, Waiver, and Consent (AWC) agreement under FINRA Case #2023078217101.

Corrie was found in violation of FINRA rules after he refused to produce information and documents requested by FINRA in connection with its investigation into the circumstances giving rise to the Form U5 filed by his former member firm. The Form U5, formally known as the Uniform Termination Notice for Securities Industry Registration, is a required regulatory filing that discloses the reasons for a registered representative's departure from a firm.

In Corrie's case, the Form U5 disclosed that his firm had terminated him for excessive use of Unit Investment Trust (UIT) products. A Unit Investment Trust is a type of investment product that holds a fixed portfolio of securities, typically bonds or stocks, for a set period. UITs have defined termination dates, at which point the holdings are sold and proceeds are returned to investors. While UITs can be appropriate investment vehicles for certain investors, excessive use of UITs raises significant regulatory concerns.

Excessive UIT trading, sometimes referred to as UIT rolling, occurs when a broker repeatedly recommends that clients purchase UITs, then sell or surrender them before maturity to purchase new UITs. This pattern generates commissions for the broker on each new purchase while subjecting the customer to unnecessary sales charges and potentially undermining the buy-and-hold strategy that UITs are designed to provide. FINRA has identified excessive UIT switching as a priority concern and has brought numerous enforcement actions related to this practice.

The seriousness of the underlying allegations was further underscored when Corrie's former firm filed an amended Form U5 disclosing that its internal review had concluded and that it had made remediation payments related to Corrie's trading activity. The fact that the firm made remediation payments indicates that customers suffered financial harm as a result of Corrie's conduct and that the firm took steps to compensate those affected.

When FINRA requested information and documents to investigate these matters, Corrie refused to cooperate. Under FINRA Rule 8210, associated persons are obligated to comply with FINRA's investigative requests. Refusal to do so is a standalone violation that typically results in a permanent bar from the industry.

Without admitting or denying the findings, Corrie consented to the sanction and the entry of findings against him. He is now permanently prohibited from working with any FINRA-registered broker-dealer.

Investors should be cautious about brokers who frequently recommend selling existing investments to purchase new ones, particularly when the products involved carry sales charges. Frequent turnover in UIT holdings or similar products may indicate that a broker is prioritizing their own commissions over the client's financial interests. Reviewing trade confirmations and account statements regularly can help identify patterns of excessive trading.

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According to FINRA, Mehdi Ahmad El Sayed Mohamad (CRD #7474704), a former registered representative based in Woodside, New York, was barred from association with any FINRA member firm in all capacities. The bar was issued on August 27, 2024, through an Acceptance, Waiver, and Consent (AWC) agreement...

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According to FINRA, Mehdi Ahmad El Sayed Mohamad (CRD #7474704), a former registered representative based in Woodside, New York, was barred from association with any FINRA member firm in all capacities. The bar was issued on August 27, 2024, through an Acceptance, Waiver, and Consent (AWC) agreement under FINRA Case #2024081490001.

El Sayed Mohamad was found in violation of FINRA rules after he refused to produce information and documents requested by FINRA in connection with its investigation of allegations made by his former member firm on a Form U5. The Form U5, formally known as the Uniform Termination Notice for Securities Industry Registration, is a mandatory regulatory filing that broker-dealers must submit when a registered representative leaves the firm. The form includes disclosures about the reason for the representative's departure, which become part of the individual's permanent regulatory record.

In this case, the Form U5 disclosed that El Sayed Mohamad was discharged by his firm for making unauthorized charges to a customer's affiliate bank credit card for his personal use. This type of conduct constitutes conversion, which is the unauthorized taking or use of another party's funds or property for personal benefit. Making unauthorized charges to a customer's credit card is not merely a regulatory violation; it is a fundamental breach of the trust that customers place in their financial professionals and may also constitute criminal conduct.

The allegations are particularly concerning because they involve a direct taking from a customer. Unlike some regulatory violations that may involve technical rule infractions or failures of supervision, unauthorized use of a customer's credit card represents a deliberate act of financial exploitation. Customers entrust their personal financial information to their brokers and the firms they work for, and the misuse of that information for personal gain is among the most egregious forms of broker misconduct.

When FINRA sought to investigate these serious allegations by requesting information and documents from El Sayed Mohamad, he refused to cooperate. Under FINRA Rule 8210, all persons associated with a FINRA member firm are required to provide information and documents when requested by FINRA in furtherance of its regulatory investigations. This obligation extends to former associated persons as well. Failure to comply with a Rule 8210 request is an independent sanctionable violation that typically results in a bar from the securities industry.

Without admitting or denying the findings, El Sayed Mohamad consented to the sanction and the entry of findings against him. He is now permanently prohibited from associating with any FINRA-registered broker-dealer in any capacity.

Investors should carefully monitor all accounts connected to their brokerage relationship, including any affiliated banking products. Unauthorized charges or transactions should be reported immediately to the firm's compliance department. FINRA's BrokerCheck tool allows investors to research the background and disciplinary history of any registered broker before entrusting them with access to personal financial information.

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According to FINRA, Richard Celis Davalos (CRD #7194114), a former registered representative based in Kyle, Texas, was barred from association with any FINRA member firm in all capacities. The bar was issued on August 28, 2024, through an Acceptance, Waiver, and Consent (AWC) agreement under FINRA C...

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According to FINRA, Richard Celis Davalos (CRD #7194114), a former registered representative based in Kyle, Texas, was barred from association with any FINRA member firm in all capacities. The bar was issued on August 28, 2024, through an Acceptance, Waiver, and Consent (AWC) agreement under FINRA Case #2023078946501.

Davalos was found in violation of FINRA rules after he refused to appear for on-the-record testimony requested by FINRA during its review of an amended Form U5 filed by his previous member firm. The Form U5, formally known as the Uniform Termination Notice for Securities Industry Registration, is a regulatory filing that firms submit when a registered representative leaves. When a firm later discovers additional information relevant to the reason for departure, it may file an amended Form U5 to update the record. The fact that Davalos's former firm filed an amended Form U5 indicates that new or additional information came to light after his initial departure.

The amended Form U5 stated that the firm had initiated an internal investigation of Davalos related to two separate issues: his personal automobile loan application and outside business activity (OBA). Both of these matters raise important regulatory concerns.

Regarding the automobile loan application, while the specific details were not fully disclosed, issues involving personal loan applications by registered representatives can involve misrepresentations of income, employment status, or other material information. Such conduct can reflect on the individual's honesty and integrity, which are fundamental requirements for anyone working in the securities industry.

Outside business activity is governed by FINRA Rule 3270, which requires registered representatives to provide prior written notice to their employing firm of any business activity outside the scope of their relationship with the firm. This rule exists to ensure that firms can evaluate whether the outside activity creates conflicts of interest, could interfere with the representative's responsibilities to customers, or could give customers the false impression that the activity is endorsed or supervised by the firm. Failure to disclose outside business activities prevents proper supervisory oversight and can expose investors to unregulated risks.

When FINRA requested that Davalos appear for on-the-record testimony to investigate these matters, he refused. Under FINRA Rule 8210, all associated persons must cooperate with FINRA's investigative requests, including appearing for testimony. Refusal to comply is a serious standalone violation that typically results in a permanent bar from the industry.

Without admitting or denying the findings, Davalos consented to the sanction and the entry of findings against him. He is now permanently barred from working with any FINRA-registered broker-dealer.

Investors should be aware that their brokers are required to disclose outside business activities. If your broker is involved in business ventures outside of their brokerage firm, you should verify whether those activities have been properly disclosed and approved. FINRA's BrokerCheck tool provides information about a broker's outside business activities and disciplinary history, making it a valuable resource for due diligence.

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According to FINRA, Vincent Mallon (CRD #5039515), a registered representative based in Massapequa, New York, was fined $5,000 and suspended from association with any FINRA member in all capacities for one month after it was found that he falsely certified the completion of continuing education requ...

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According to FINRA, Vincent Mallon (CRD #5039515), a registered representative based in Massapequa, New York, was fined $5,000 and suspended from association with any FINRA member in all capacities for one month after it was found that he falsely certified the completion of continuing education requirements for his state insurance license.

Continuing education is a fundamental obligation for licensed financial professionals. State regulators require insurance-licensed individuals to complete a set number of continuing education hours to maintain their licenses. These requirements are designed to ensure that professionals stay current with evolving regulations, products, and ethical standards. When a registered representative has someone else complete these requirements on their behalf and then certifies that they did the work personally, it constitutes a serious breach of professional integrity.

In Mallon's case, FINRA found that he certified to the State of New York that he had personally completed 15 hours of continuing education required to renew his state insurance license. In reality, another person had completed that continuing education on his behalf. This false certification misrepresented Mallon's compliance with state licensing obligations and called into question whether he possessed the knowledge that the continuing education courses were intended to impart.

Without admitting or denying the findings, Mallon consented to the sanctions and to the entry of findings against him through an Acceptance, Waiver, and Consent (AWC) agreement issued on August 2, 2024. The AWC process allows FINRA to resolve disciplinary matters efficiently when the respondent agrees to accept proposed sanctions. Mallon was sanctioned with a $5,000 fine and a one-month suspension in all capacities. The suspension was in effect from September 3, 2024, through October 2, 2024.

This case is documented under FINRA Case #2024081404501. It was part of a series of enforcement actions FINRA brought against multiple New York-based registered representatives who engaged in similar continuing education fraud during the same time period, indicating that regulators are devoting significant attention to this type of misconduct.

Investors should be aware that a broker's willingness to misrepresent their qualifications is a red flag that may indicate broader ethical issues. Checking a financial professional's disciplinary history through FINRA BrokerCheck before entrusting them with your investments is an important step in protecting your financial interests. Continuing education fraud, while it may seem minor compared to outright theft or fraud, reflects a lack of commitment to the professional standards that exist to safeguard investors.

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According to FINRA, Kim Ray Kunz (CRD #718618), a registered representative based in Templeton, California, was fined $7,500, suspended from association with any FINRA member in all capacities for three months, and ordered to pay $1,927 plus interest in partial restitution to a customer. Kunz was fo...

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According to FINRA, Kim Ray Kunz (CRD #718618), a registered representative based in Templeton, California, was fined $7,500, suspended from association with any FINRA member in all capacities for three months, and ordered to pay $1,927 plus interest in partial restitution to a customer. Kunz was found in violation of Regulation Best Interest (Reg BI) for recommending that two retail customers invest in speculative, unrated debt securities that were inconsistent with their investment profiles.

Regulation Best Interest, which took effect in June 2020, requires broker-dealers and their associated persons to act in the best interest of retail customers when making investment recommendations. This means that a broker must have a reasonable basis for believing that a recommendation is in the customer's best interest, taking into account the customer's investment profile, including their risk tolerance, financial situation, and investment objectives.

FINRA's findings revealed that Kunz recommended that two retail customers purchase speculative, unrated debt securities that involved a high degree of risk, were illiquid, and were only suitable for persons with substantial financial resources who had no need for liquidity. Both customers had stated a moderate risk tolerance with an investment objective of income, and neither customer had indicated that speculation was part of their investment goals. Despite this, Kunz's recommendations resulted in one customer having a concentration of more than 65 percent of her liquid net worth in alternative investments, and the other customer having more than 30 percent of their portfolio in alternative investments. These concentration levels were grossly disproportionate to the customers' stated risk profiles and financial needs.

Kunz earned $1,927 in commissions from these transactions, which he was ordered to disgorge as partial restitution. Without admitting or denying the findings, Kunz consented to the sanctions through an AWC agreement issued on August 5, 2024. The three-month suspension was in effect from September 3, 2024, through December 2, 2024. This matter is documented under FINRA Case #2021070498103.

This case serves as an important reminder for investors about the protections afforded under Reg BI. Investors should be cautious of recommendations that involve high concentrations of speculative or illiquid investments, particularly when those recommendations do not align with their stated risk tolerance and investment objectives. Investors have the right to receive recommendations that genuinely serve their best interests, and they should not hesitate to question any investment that seems inconsistent with their financial goals.

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According to FINRA, John Rollin Revelle (CRD #5619752), a registered representative based in Jacksonville, Florida, was assessed a deferred fine of $7,500 and suspended from association with any FINRA member in all capacities for 10 months. Revelle was found in violation of FINRA rules for drafting ...

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According to FINRA, John Rollin Revelle (CRD #5619752), a registered representative based in Jacksonville, Florida, was assessed a deferred fine of $7,500 and suspended from association with any FINRA member in all capacities for 10 months. Revelle was found in violation of FINRA rules for drafting and disseminating materially misleading asset verification letters and for failing to disclose an outside business activity (OBA) to his member firm.

FINRA's findings revealed that Revelle drafted, signed, and disseminated asset verification letters on his member firm's letterhead to third parties. These letters contained material misrepresentations, including incorrectly stating that the individual on whose behalf the letters were sent was a customer of the firm. One of the letters materially overstated the value of the individual's assets, including cryptocurrency assets, and falsely stated that Revelle had verified those assets when he had not actually done so. Revelle did not obtain his firm's approval before sending these letters. Using a firm's letterhead to lend credibility to false statements is a serious violation that can expose both the firm and unsuspecting third parties to significant harm.

In addition to the fraudulent letters, FINRA found that Revelle engaged in an outside business activity that he failed to disclose to his firm. Specifically, Revelle was employed by a start-up decentralized cryptocurrency exchange to assist in processing investments. He earned more than $29,000 from this undisclosed activity. FINRA rules require registered representatives to provide prior written notice to their firms of any outside business activities so that firms can evaluate potential conflicts of interest and supervise their representatives appropriately.

Without admitting or denying the findings, Revelle consented to the sanctions through an AWC agreement issued on August 5, 2024. The 10-month suspension was in effect from August 5, 2024, through June 4, 2025, reflecting the seriousness of the misconduct. This matter is documented under FINRA Case #2022076194201.

This case underscores several important lessons for investors. First, investors should be wary of any documents presented on a brokerage firm's letterhead and should independently verify their authenticity with the firm itself. Second, the involvement of a registered representative in undisclosed cryptocurrency-related business activities raises significant conflict-of-interest concerns. Investors should always verify whether their broker has any outside business activities by checking their FINRA BrokerCheck report. The combination of fabricating official documents and concealing outside employment demonstrates a pattern of dishonesty that should serve as a serious warning to any investor considering working with this individual.

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According to FINRA, Jack S. Falzone Jr. (CRD #7182129), a registered representative based in Kings Park, New York, was fined $5,000 and suspended from association with any FINRA member in all capacities for one month after it was found that he falsely certified the completion of continuing education...

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According to FINRA, Jack S. Falzone Jr. (CRD #7182129), a registered representative based in Kings Park, New York, was fined $5,000 and suspended from association with any FINRA member in all capacities for one month after it was found that he falsely certified the completion of continuing education requirements for his state insurance license.

Continuing education requirements serve as a vital safeguard in the financial services industry. They ensure that licensed professionals maintain current knowledge of regulatory changes, new financial products, ethical standards, and best practices for serving clients. State regulators mandate these requirements as a condition of license renewal, and certifying their completion is a formal attestation that the professional has met the standards required to continue practicing.

In this case, FINRA's findings established that Falzone certified to the State of New York that he had personally completed 15 hours of continuing education required to renew his state insurance license. However, the investigation revealed that another person had completed that continuing education on his behalf. By falsely certifying that he had personally completed the coursework, Falzone misrepresented his compliance with state regulatory requirements and potentially operated without the knowledge base that the education was designed to provide.

Without admitting or denying the findings, Falzone consented to the sanctions and to the entry of findings against him through an Acceptance, Waiver, and Consent (AWC) agreement issued on August 6, 2024. The sanctions included a $5,000 fine and a one-month suspension from association with any FINRA member in all capacities. The suspension was in effect from September 3, 2024, through October 2, 2024. This matter is documented under FINRA Case #2024081398801.

Falzone's case was one of several similar enforcement actions taken by FINRA during this period against New York-based registered representatives who had someone else complete their continuing education requirements. This cluster of related cases suggests either a coordinated scheme or a shared service that facilitated this type of fraud, and it demonstrates that FINRA is actively investigating and prosecuting these violations.

For investors, this case reinforces the importance of due diligence when selecting a financial professional. A broker who is willing to falsify professional certifications may be willing to cut corners in other areas of their practice that more directly impact client interests. Investors can and should use FINRA BrokerCheck to review the disciplinary history of any broker before establishing a relationship. Regulatory actions such as this one are publicly available and can provide valuable insight into a professional's character and commitment to ethical conduct.

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