Bad Brokers

According to FINRA, Daniel Brendan Fugiel (CRD #2685120), based in Ponte Vedra, Florida, was assessed a deferred fine of $2,500 and suspended from association with any FINRA member in all capacities for two months. The suspension was in effect from September 3, 2024, through November 2, 2024.

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According to FINRA, Daniel Brendan Fugiel (CRD #2685120), based in Ponte Vedra, Florida, was assessed a deferred fine of $2,500 and suspended from association with any FINRA member in all capacities for two months. The suspension was in effect from September 3, 2024, through November 2, 2024.

Without admitting or denying the findings, Fugiel consented to the sanctions and to the entry of findings that he failed to obtain prior written consent from his member firm to open and maintain an outside personal securities account. Fugiel opened the account at another FINRA member firm and did not obtain consent at any time before his firm discovered it. He also inaccurately certified on his annual compliance certification that he had disclosed all applicable trading accounts.

FINRA Rule 3210 requires that registered representatives obtain prior written consent from their employing firm before opening or maintaining securities accounts at other firms. This rule is a cornerstone of the securities industry's supervisory framework. It exists to allow firms to monitor the trading activity of their registered representatives, detect potential conflicts of interest, identify insider trading, and ensure compliance with industry regulations. When a broker opens an undisclosed account, the firm is unable to fulfill its supervisory obligations, which can expose both the firm and its customers to risk.

The additional finding that Fugiel inaccurately certified on his annual compliance certification that he had disclosed all applicable trading accounts compounds the seriousness of this violation. Annual compliance certifications are formal attestations that require registered representatives to confirm that they are in compliance with firm policies and regulatory requirements. Providing false information on such certifications undermines the integrity of the compliance process and raises questions about a representative's trustworthiness.

Investors should understand that the requirement for brokers to disclose their personal trading accounts is not merely a bureaucratic formality. It is an important mechanism that helps prevent abusive practices such as front-running customer orders or trading on material nonpublic information. When a broker keeps a secret account, it creates a blind spot in the regulatory framework designed to protect investors.

This case also illustrates the concept of deferred fines, which FINRA may impose when a respondent demonstrates an inability to pay. While the monetary penalty may be modest, the two-month suspension and the permanent mark on Fugiel's regulatory record carry significant professional consequences. Investors are encouraged to review their financial professional's disciplinary history through FINRA BrokerCheck before entrusting them with investment decisions.

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According to FINRA, Richard Joseph Jackson (CRD #2224335), based in Long Beach, New York, was assessed a deferred fine of $5,000 and suspended from association with any FINRA member in all capacities for one month. The suspension was in effect from September 3, 2024, through October 2, 2024.

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According to FINRA, Richard Joseph Jackson (CRD #2224335), based in Long Beach, New York, was assessed a deferred fine of $5,000 and suspended from association with any FINRA member in all capacities for one month. The suspension was in effect from September 3, 2024, through October 2, 2024.

Without admitting or denying the findings, Jackson consented to the sanctions and to the entry of findings that he made promissory, unwarranted, and exaggerated claims in individual email communications he sent to customers. These communications included unwarranted predictions and projections of future performance. The emails were also found not to be fair and balanced because they omitted key risks associated with the specific stocks or industries discussed.

FINRA Rule 2210, which governs communications with the public, requires that all broker communications be fair, balanced, and not misleading. This means that when a broker discusses a potential investment, they must present both the potential benefits and the material risks. Making predictions or projections about future performance, particularly in a promissory or exaggerated manner, is a serious violation because it can lead investors to make decisions based on unrealistic expectations rather than sound analysis.

The securities industry has long recognized that predicting future market performance with certainty is impossible. When a broker presents such predictions as though they are reliable, they are misrepresenting the nature of investing and potentially leading customers toward inappropriate risk. Omitting key risks makes the situation worse by depriving investors of the information they need to make informed decisions. The requirement for balanced communications is fundamental to the principle of informed consent in securities transactions.

Investors should be cautious of any financial professional who makes bold predictions about future investment returns or who presents investment opportunities without discussing the associated risks. Legitimate investment advice always includes a discussion of potential downsides, market uncertainties, and the specific risks tied to particular securities or sectors. If a broker consistently presents an overly optimistic picture without acknowledging risks, that should be considered a red flag.

This case serves as a useful reminder that FINRA monitors not only formal marketing materials and advertisements but also individual email communications between brokers and their customers. All communications are subject to the same standards of fairness and balance. Investors who receive communications that seem too good to be true should consider verifying the claims independently and checking their broker's disciplinary record through FINRA BrokerCheck.

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According to FINRA, David M. Reyes (CRD #5330710), based in Massapequa Park, New York, was fined $5,000 and suspended from association with any FINRA member in all capacities for one month. The suspension was in effect from September 16, 2024, through October 15, 2024.

Without admitting or denying ...

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According to FINRA, David M. Reyes (CRD #5330710), based in Massapequa Park, New York, was fined $5,000 and suspended from association with any FINRA member in all capacities for one month. The suspension was in effect from September 16, 2024, through October 15, 2024.

Without admitting or denying the findings, Reyes consented to the sanctions and to the entry of findings 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 when, in fact, another person had completed that continuing education on his behalf. This false certification represents a fundamental breach of the honesty and integrity standards expected of financial professionals.

Continuing education requirements are a critical component of the regulatory framework governing financial professionals. These requirements ensure that licensed individuals stay current with changes in laws, regulations, products, and industry practices. The knowledge gained through continuing education directly impacts the quality of advice and service that financial professionals provide to their clients. When a broker circumvents these requirements by having someone else complete the coursework, they are essentially admitting that they do not possess the current knowledge that their license is supposed to certify.

This case is one of several similar enforcement actions taken by FINRA against individuals who falsely certified the completion of continuing education in the State of New York. The pattern of enforcement demonstrates that FINRA is actively investigating and sanctioning this type of misconduct. Financial professionals should understand that falsifying continuing education certifications will result in disciplinary action regardless of how common the practice may appear.

For investors, this case underscores several important points. First, a professional license is only as meaningful as the knowledge and competence it represents. When a broker bypasses the educational requirements associated with their license, the value of that license as a marker of competence is diminished. Second, dishonesty in one area of professional conduct often raises questions about integrity in other areas. Investors have a right to expect that their financial advisors meet all of their professional obligations honestly and completely.

Investors are encouraged to use FINRA BrokerCheck to verify the credentials, registrations, and disciplinary history of their financial professionals. Staying informed about the regulatory record of the people managing your investments is an essential part of protecting your financial interests.

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According to FINRA, Richard Foerster Reynolds (CRD #2162706), based in Melbourne, Florida, was assessed a deferred fine of $5,000, suspended from association with any FINRA member in all capacities for three months, and ordered to pay $35,950, plus interest, in deferred restitution to a customer. Th...

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According to FINRA, Richard Foerster Reynolds (CRD #2162706), based in Melbourne, Florida, was assessed a deferred fine of $5,000, suspended from association with any FINRA member in all capacities for three months, and ordered to pay $35,950, plus interest, in deferred restitution to a customer. The suspension was in effect from September 3, 2024, through December 2, 2024.

Without admitting or denying the findings, Reynolds consented to the sanctions and to the entry of findings that he excessively and unsuitably traded the account of a senior customer. Reynolds recommended high-frequency in-and-out trading to the customer, who had a medium risk tolerance, even when the price of his recommended securities did not materially change. The customer relied on Reynolds' advice and routinely followed his recommendations. Reynolds' trading recommendations generated total trading costs of $39,436, including $35,950 in commissions.

Excessive trading, also known as churning, is one of the most harmful practices in the securities industry. It occurs when a broker recommends an unreasonable number of transactions in a customer's account, primarily to generate commissions rather than to benefit the customer. When a broker engages in high-frequency in-and-out trading where securities are bought and quickly sold without meaningful price changes, it becomes clear that the trading activity serves the broker's financial interests, not the customer's investment objectives.

The fact that the customer in this case was a senior investor with a medium risk tolerance makes Reynolds' conduct especially troubling. Senior investors often have limited time horizons to recover from investment losses, and a medium risk tolerance clearly does not contemplate the kind of aggressive, high-frequency trading that Reynolds recommended. FINRA has made the protection of senior investors a priority, recognizing their particular vulnerability to unsuitable investment strategies and financial exploitation.

Investors should be vigilant about monitoring their account statements for signs of excessive trading. Warning signs include frequent purchases and sales of the same or similar securities, high levels of commission charges relative to account value, and portfolio turnover that seems inconsistent with the investor's stated objectives. If an investor notices these patterns, they should question their broker and consider seeking a second opinion.

The restitution order in this case ensures that the customer will be made whole for the commissions generated by the excessive trading. This is an important aspect of FINRA's enforcement approach, which seeks not only to punish misconduct but also to provide meaningful relief to harmed investors.

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According to FINRA, George Michael Condzal (CRD #1890265), based in Smithtown, New York, was fined $5,000 and suspended from association with any FINRA member in all capacities for one month. The suspension was in effect from September 16, 2024, through October 15, 2024.

Without admitting or denyin...

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According to FINRA, George Michael Condzal (CRD #1890265), based in Smithtown, New York, was fined $5,000 and suspended from association with any FINRA member in all capacities for one month. The suspension was in effect from September 16, 2024, through October 15, 2024.

Without admitting or denying the findings, Condzal consented to the sanctions and to the entry of findings 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 when, in fact, another person had completed that continuing education on his behalf. This false certification represents a violation of the ethical standards that FINRA expects all registered representatives to uphold.

Continuing education is a regulatory requirement designed to ensure that financial professionals maintain the knowledge and skills necessary to serve their clients competently. In the State of New York, insurance professionals are required to complete a specified number of hours of continuing education as a condition of license renewal. These requirements cover important topics such as regulatory updates, ethical practices, and product knowledge that directly impact the quality of service investors and policyholders receive.

When a registered representative falsely certifies that they have completed required continuing education, they are engaging in a form of fraud against the regulatory system. The certification process relies on the honesty of the individual making the attestation, and when that trust is violated, it undermines confidence in the entire licensing framework. FINRA has made clear through a series of enforcement actions that it takes this type of dishonesty seriously and will impose meaningful sanctions on those who engage in it.

This case is part of a notable cluster of similar disciplinary actions involving New York-based financial professionals who had others complete continuing education on their behalf. The pattern suggests that this practice may have been more widespread than regulators initially anticipated, prompting a focused enforcement effort by FINRA.

For investors, this case reinforces the value of conducting due diligence on financial professionals. FINRA BrokerCheck provides free access to the disciplinary history, qualifications, and employment record of registered brokers and advisors. Investors should review this information regularly, particularly when establishing new advisory relationships. A pattern of dishonesty, even in seemingly minor administrative matters, can be an indicator of broader ethical concerns. Investors deserve financial professionals who take all of their regulatory obligations seriously, including the obligation to maintain their professional knowledge through legitimate continuing education.

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According to FINRA, William Pergola (CRD #1132631), based in Plainview, New York, was fined $5,000 and suspended from association with any FINRA member in all capacities for one month. The suspension was in effect from September 16, 2024, through October 15, 2024.

Without admitting or denying the f...

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According to FINRA, William Pergola (CRD #1132631), based in Plainview, New York, was fined $5,000 and suspended from association with any FINRA member in all capacities for one month. The suspension was in effect from September 16, 2024, through October 15, 2024.

Without admitting or denying the findings, Pergola consented to the sanctions and to the entry of findings 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 when, in fact, another person had completed that continuing education on his behalf. This misrepresentation constitutes a violation of the professional and ethical standards that govern registered representatives in the securities industry.

The continuing education requirements that apply to insurance-licensed financial professionals exist to protect consumers. These educational programs are designed to keep professionals informed about new products, regulatory changes, compliance best practices, and ethical obligations. By having another person complete the coursework, a professional effectively certifies to the state that they possess knowledge and training they do not actually have. This creates a gap between the professional's actual competence and the competence the state believes they have, which can ultimately harm the clients who rely on their advice.

FINRA's enforcement of continuing education fraud reflects the organization's broader commitment to maintaining honesty and integrity in the securities industry. Although continuing education fraud may seem like a relatively minor infraction compared to cases involving direct financial harm to investors, FINRA recognizes that dishonesty in any form is corrosive to the trust that underpins the financial services industry. A broker who is willing to deceive regulators about their qualifications may be more likely to engage in other forms of misconduct.

This case is one of multiple similar actions taken against New York-based professionals during this enforcement cycle, indicating that FINRA identified a pattern of continuing education fraud and pursued coordinated disciplinary proceedings. The consistency of the sanctions imposed, typically a $5,000 fine and one-month suspension, reflects FINRA's effort to apply penalties fairly and predictably.

Investors should take note of these enforcement actions and use them as a reminder to verify the qualifications and disciplinary records of their financial professionals. FINRA BrokerCheck is a valuable free tool that provides transparency into a broker's history, including any sanctions or disciplinary actions. Staying informed is one of the most effective ways investors can protect themselves.

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According to FINRA, Jonathan Farchi-Segal (CRD #7250620), based in North Miami, Florida, was assessed a deferred fine of $10,000 and suspended from association with any FINRA funding portal member in all capacities for 12 months. The suspension was in effect from September 3, 2024, through September...

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According to FINRA, Jonathan Farchi-Segal (CRD #7250620), based in North Miami, Florida, was assessed a deferred fine of $10,000 and suspended from association with any FINRA funding portal member in all capacities for 12 months. The suspension was in effect from September 3, 2024, through September 2, 2025.

Without admitting or denying the findings, Farchi-Segal consented to the sanctions and to the entry of findings that he initially made false statements to FINRA in response to an information request in connection with a Regulation Crowdfunding (Reg CF) offering through his FINRA-registered funding portal member firm. The purpose of the offering was to raise funds to purchase a luxury handbag and then resell it for a profit. Farchi-Segal incorrectly identified a third party as the prior owner of the handbag, provided FINRA with a purchase agreement that was not authentic, and stated there was no receipt when, in fact, there was one. Ultimately, Farchi-Segal corrected his misstatements.

Making false statements to FINRA is one of the most serious violations a registered professional can commit. FINRA's ability to regulate the securities industry and protect investors depends on receiving truthful and complete information from the individuals and firms it oversees. When a broker or funding portal operator provides false information in response to a regulatory inquiry, it obstructs the regulatory process and can delay or prevent the detection of misconduct that harms investors.

Regulation Crowdfunding, established under Title III of the JOBS Act, allows companies to raise capital from everyday investors through registered funding portals. Because Reg CF offerings are available to non-accredited investors who may have limited investment experience, the integrity of the information surrounding these offerings is critically important. Funding portals have a gatekeeping responsibility to ensure that offerings conducted through their platforms comply with applicable regulations.

The nature of the underlying offering in this case, raising money to purchase and resell a luxury handbag, is unusual and highlights the wide range of business ventures that seek funding through Reg CF. Regardless of the nature of the business, the regulatory obligations are the same, and providing false information to regulators is never acceptable.

While Farchi-Segal ultimately corrected his misstatements, the initial dishonesty resulted in a substantial 12-month suspension and a $10,000 deferred fine. Investors should understand that FINRA takes false statements extremely seriously and that the consequences extend well beyond the immediate sanctions. This case serves as a reminder that transparency and honesty with regulators are non-negotiable obligations for anyone operating in the securities industry.

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According to FINRA, Shanon Gut (CRD #5114104), based in Copiague, New York, was fined $5,000 and suspended from association with any FINRA member in all capacities for one month. The suspension was in effect from September 16, 2024, through October 15, 2024.

Without admitting or denying the finding...

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According to FINRA, Shanon Gut (CRD #5114104), based in Copiague, New York, was fined $5,000 and suspended from association with any FINRA member in all capacities for one month. The suspension was in effect from September 16, 2024, through October 15, 2024.

Without admitting or denying the findings, Gut consented to the sanctions and to the entry of findings that she certified to the State of New York that she had personally completed 18 hours of continuing education required to renew her state insurance license when, in fact, another person had completed that continuing education on her behalf. This false certification represents a violation of the professional integrity standards that FINRA requires of all registered individuals.

Continuing education is a mandatory requirement for insurance-licensed financial professionals and serves a vital purpose in the regulatory system. The 18 hours of coursework that Gut was required to complete covers essential topics that directly affect her ability to provide competent advice and service to clients. By having another person complete the coursework in her place, Gut not only deceived state regulators but also deprived herself of the updated knowledge that the training was designed to provide.

This enforcement action is part of a significant cluster of FINRA disciplinary actions targeting New York-based financial professionals who had others complete their continuing education requirements. The coordinated nature of these cases suggests that FINRA undertook a deliberate investigation into continuing education fraud, likely prompted by evidence that the practice was occurring among multiple professionals. The fact that FINRA pursued each of these cases individually demonstrates the organization's commitment to holding each person accountable for their own conduct.

The sanctions imposed on Gut are consistent with those applied to similarly situated individuals in this enforcement cycle: a $5,000 fine and a one-month suspension from all FINRA-associated capacities. While these sanctions may appear relatively modest, the impact on a professional's career and reputation can be significant. Disciplinary actions are permanently recorded on a broker's regulatory record and are publicly accessible through FINRA BrokerCheck.

Investors should understand that continuing education fraud, while it may not directly result in financial losses, is a form of dishonesty that erodes the trust between financial professionals and the public. Investors deserve to know that their advisors have fulfilled all of the educational and licensing requirements associated with their roles. Regularly checking FINRA BrokerCheck is an effective way for investors to stay informed about the regulatory standing of the professionals who manage their money.

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According to FINRA, Kieran John Loughran (CRD #2826208), based in Brooklyn, New York, was assessed a deferred fine of $5,000, suspended from association with any FINRA member in all capacities for three months, and ordered to pay $43,495.37, plus interest, in deferred restitution to a customer. The ...

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According to FINRA, Kieran John Loughran (CRD #2826208), based in Brooklyn, New York, was assessed a deferred fine of $5,000, suspended from association with any FINRA member in all capacities for three months, and ordered to pay $43,495.37, plus interest, in deferred restitution to a customer. The suspension was in effect from September 3, 2024, through December 2, 2024.

Without admitting or denying the findings, Loughran consented to the sanctions and to the entry of findings that he excessively and unsuitably traded the account of one customer, a senior who was a farmer and business owner. Loughran recommended high-frequency in-and-out trading to the customer, even when the price of his recommended securities did not materially change. The customer relied on Loughran's advice and routinely followed his recommendations, and as a result, Loughran exercised de facto control over the account. Loughran's trading generated total trading costs of $49,633.24, including $43,495.37 in commissions, and caused $179,878 in total realized losses.

Excessive trading, commonly known as churning, is a serious violation of FINRA rules and securities regulations. It occurs when a broker recommends transactions primarily to generate commissions rather than to serve the customer's investment interests. The concept of de facto control is particularly important in this case. Even though the customer may have technically authorized each trade, the findings indicate that the customer relied so heavily on Loughran's recommendations that Loughran effectively controlled the trading activity.

The harm caused in this case is substantial. The customer, a senior farmer and business owner, suffered $179,878 in realized losses while Loughran generated nearly $50,000 in trading costs. For a senior investor, losses of this magnitude can have devastating consequences for retirement security and financial well-being. FINRA has repeatedly emphasized that brokers have a heightened obligation to ensure that their recommendations are suitable for senior customers, who may have limited ability to recover from significant investment losses.

Investors should be aware of the warning signs of excessive trading, including frequent buy-and-sell transactions in the same securities, high commission charges relative to account size, and consistent losses despite active trading. If you suspect your broker is churning your account, review your account statements carefully, calculate the total commissions paid, and consider consulting with an independent professional. FINRA's restitution order in this case ensures the customer will recover the commissions paid, providing meaningful financial relief.

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According to FINRA, Stewart Ginn (CRD #4503197), based in Encinitas, California, was fined $50,000, suspended from association with any FINRA member in all capacities for 18 months, and ordered to pay $115,000, plus interest, in restitution to a customer. The suspension is in effect from September 1...

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According to FINRA, Stewart Ginn (CRD #4503197), based in Encinitas, California, was fined $50,000, suspended from association with any FINRA member in all capacities for 18 months, and ordered to pay $115,000, plus interest, in restitution to a customer. The suspension is in effect from September 16, 2024, through March 15, 2026.

Without admitting or denying the allegations, Ginn consented to the sanctions and to the entry of findings that he willfully violated Regulation Best Interest (Reg BI) by excessively trading customer accounts. None of the customers, some of whom were seniors, was an aggressive investor. Ginn engaged in frequent in-and-out trades while charging high commissions on both buys and sells. His trading caused customers to incur realized losses of more than $2.22 million while generating more than $2.24 million in commissions for him and his member firm. Ginn routinely recommended large equities positions that he often quickly sold, even when the price had changed only minimally. The series of recommendations was found not to be in those customers' best interests. Ginn also improperly traded on discretion in a majority of the customer accounts without obtaining customer authorization for each transaction. His trading resulted in annualized cost-to-equity ratios of between 14 percent and 27 percent.

This case is notable for the severity of the harm caused and the magnitude of the sanctions imposed. The finding that Ginn willfully violated Reg BI is particularly significant. Regulation Best Interest, which took effect in June 2020, requires broker-dealers and their associated persons to act in the best interest of the customer when making a recommendation. A willful violation of Reg BI carries additional regulatory consequences, including potential statutory disqualification.

The financial metrics in this case paint a stark picture. The annualized cost-to-equity ratios of 14 to 27 percent mean that customers' accounts would have needed to generate returns of that magnitude just to break even after commissions. The fact that customers suffered more than $2.22 million in losses while Ginn and his firm collected over $2.24 million in commissions demonstrates that the trading activity served the broker's interests, not the customers'. Additionally, trading on discretion without proper authorization strips customers of control over their own accounts.

Investors should understand that Reg BI creates an enforceable standard requiring brokers to prioritize their customers' interests. Excessive trading and unauthorized discretionary trading are clear violations of this standard. This case is a powerful example of the consequences that follow when a broker puts their own financial gain ahead of their clients' well-being.

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