Bad Brokers

According to FINRA, Zachary Ross McCraw was barred from association with any FINRA member in all capacities on July 18, 2024, after he refused to appear for on-the-record testimony requested by FINRA during the course of its investigation.

The investigation concerned the circumstances giving rise...

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According to FINRA, Zachary Ross McCraw was barred from association with any FINRA member in all capacities on July 18, 2024, after he refused to appear for on-the-record testimony requested by FINRA during the course of its investigation.

The investigation concerned the circumstances giving rise to a Form U5 filed by his member firm. The Form U5 disclosed that McCraw had voluntarily resigned after he admitted to submitting multiple non-genuine electronic client signatures and inputting incorrect dates on various insurance forms. Although McCraw initially cooperated in FINRA's investigation, he ultimately ceased doing so and refused to appear for testimony.

The underlying conduct involves serious allegations of falsifying client signatures and dates on insurance forms. Forging client signatures is a severe violation that undermines the integrity of customer documentation and can lead to unauthorized transactions or misrepresentation of customer intent. Such conduct violates fundamental principles of honesty and ethical behavior required in the securities industry.

FINRA Rule 8210 requires registered persons to cooperate with regulatory investigations. Refusing to appear for testimony is considered a serious violation because it prevents regulators from fully investigating potential misconduct. When individuals cease cooperating with FINRA investigations, they typically face a bar from the industry, which permanently prohibits them from working in any capacity with any FINRA member firm.

This case illustrates the importance of maintaining proper documentation procedures and obtaining genuine client authorization for all forms and transactions. Investors should be aware that they can verify the regulatory history of any registered representative through FINRA's BrokerCheck system, which will show bars and other disciplinary actions.

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According to FINRA, Jordan Stentiford was barred from association with any FINRA member in all capacities on July 19, 2024, after he refused to appear for on-the-record testimony requested by FINRA in connection with an investigation.

The investigation concerned the circumstances giving rise to t...

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According to FINRA, Jordan Stentiford was barred from association with any FINRA member in all capacities on July 19, 2024, after he refused to appear for on-the-record testimony requested by FINRA in connection with an investigation.

The investigation concerned the circumstances giving rise to the Form U5 filed by his member firm. The Form U5 disclosed that Stentiford had been permitted to resign after admitting to signing a customer's name on a form to apply for life insurance. This conduct constitutes forgery and is a serious violation of securities industry rules and standards.

Signing a customer's name without authorization is a fundamental breach of trust and can lead to unauthorized transactions or applications that the customer did not intend or approve. Life insurance applications involve important financial decisions and disclosures about health and other personal information. Forging a customer's signature on such a document not only violates industry rules but may also constitute fraud.

FINRA Rule 8210 requires all persons associated with FINRA member firms to cooperate with FINRA investigations by providing information and testimony when requested. Refusing to appear for testimony is itself a violation that warrants significant sanctions. When combined with the underlying allegation of forgery, the refusal to cooperate prevented FINRA from fully investigating the circumstances and determining the extent of the misconduct.

This case serves as an important reminder that registered representatives must obtain genuine customer authorization for all forms and applications. Investors should carefully review all documents they are asked to sign and should never allow their representative to sign documents on their behalf. Any instances of forged signatures should be reported to the firm and to regulators. Investors can check the background of registered representatives through FINRA's BrokerCheck system.

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According to FINRA, Jeffrey Louis Payne was fined $5,000 and suspended from association with any FINRA member in all capacities for one month on July 1, 2024, after he falsely certified to the State of New York that he had personally completed 15 hours of continuing education required to renew his s...

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According to FINRA, Jeffrey Louis Payne was fined $5,000 and suspended from association with any FINRA member in all capacities for one month on July 1, 2024, after he falsely 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.

Continuing education requirements exist to ensure that licensed professionals maintain current knowledge of industry regulations, products, and best practices. These requirements protect consumers by ensuring that the professionals serving them have up-to-date knowledge and skills. When individuals circumvent these requirements by having someone else complete the education on their behalf, they undermine the purpose of continuing education and may lack the knowledge necessary to properly serve their clients.

Falsely certifying completion of continuing education also constitutes dishonesty, which is a serious concern in the securities industry where trust and integrity are paramount. Registered representatives are expected to maintain high ethical standards, and making false certifications demonstrates a lack of integrity that can call into question other aspects of their professional conduct.

The one-month suspension, which was in effect from August 5, 2024, through September 4, 2024, reflects the seriousness of this violation. Investors should expect their financial professionals to maintain current licenses and complete all required education themselves. This case serves as a reminder that shortcuts in meeting professional requirements can result in regulatory sanctions. Investors can verify the licensing and regulatory history of financial professionals through FINRA's BrokerCheck system and state insurance department websites.

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According to FINRA, Joseph A. Occhipinti was assessed a deferred fine of $5,000 and suspended from association with any FINRA member in all capacities for one month on July 3, 2024, after he shared exam content from the Certified Financial Planner examination with other individuals in violation of C...

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According to FINRA, Joseph A. Occhipinti was assessed a deferred fine of $5,000 and suspended from association with any FINRA member in all capacities for one month on July 3, 2024, after he shared exam content from the Certified Financial Planner examination with other individuals in violation of CFP Board testing rules.

Occhipinti had agreed to abide by the CFP's Pathway Agreement, which prohibited exam misconduct before, during, and after exam administration. However, after taking and passing the exam, Occhipinti disclosed exam content through a group messaging platform to other individuals who planned to take the exam. This gave those individuals an unfair advantage and undermined the integrity of the certification process.

The CFP Board's Disciplinary and Ethics Commission found that Occhipinti engaged in exam misconduct and violated the Pathway Agreement. The Commission imposed a five-year bar on Occhipinti from applying for or obtaining the CFP certification and ordered him to complete 120 hours of continuing education credit. FINRA's action was in addition to the sanctions imposed by the CFP Board.

Professional certifications like the CFP designation are meant to signify that an individual has demonstrated competency and knowledge in their field. The integrity of these certifications depends on the security and fairness of the examination process. Sharing exam content compromises this integrity and devalues the certification for those who earned it legitimately.

This case highlights the importance of ethical behavior in obtaining and maintaining professional credentials. The one-month suspension was in effect from July 15, 2024, through August 14, 2024. Investors should understand that professional designations represent a commitment to ethical conduct as well as knowledge, and violations of certification requirements can result in disciplinary action from both the certifying body and securities regulators.

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According to FINRA, Dante Moss was fined $5,000 and suspended from association with any FINRA member in all capacities for 10 business days on July 5, 2024, after he improperly removed and retained non-public personal customer information from his firm without the firm's or the customers' consent.
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According to FINRA, Dante Moss was fined $5,000 and suspended from association with any FINRA member in all capacities for 10 business days on July 5, 2024, after he improperly removed and retained non-public personal customer information from his firm without the firm's or the customers' consent.

In anticipation of joining another FINRA member firm, Moss downloaded onto a USB drive account information for customers contained within the firm's electronic systems, including customer names, customer account numbers at the firm, and customer social security numbers. Following Moss's resignation from the firm, he improperly retained the customers' non-public personal information. That information was obtained by the FINRA member firm with which Moss became associated and registered, and subsequently returned to his original firm.

The protection of customer information is a critical responsibility for all securities professionals. Non-public personal information, particularly social security numbers and account numbers, can be used for identity theft and other fraudulent purposes if it falls into the wrong hands. Firms have policies and procedures in place to protect this information, and representatives are prohibited from removing such information without authorization.

While Moss's intent may have been to facilitate his transition to a new firm rather than to commit fraud, the unauthorized removal of customer information violates firm policies and FINRA rules designed to protect customer privacy and data security. Registered representatives who change firms must follow proper protocols for transitioning customer relationships, which do not include taking customer information without authorization.

The 10-business-day suspension, which was in effect from August 5, 2024, through August 16, 2024, reflects the seriousness of this violation. Investors should be aware that their personal information should be protected by their brokerage firm and should not be removed or shared without proper authorization and security measures.

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According to FINRA, Carnell Moore was assessed a deferred fine of $10,000 and suspended from association with any FINRA member in all capacities for four months on July 9, 2024, for failing to provide notice to his member firm that his involvement in an outside business activity exceeded his prior d...

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According to FINRA, Carnell Moore was assessed a deferred fine of $10,000 and suspended from association with any FINRA member in all capacities for four months on July 9, 2024, for failing to provide notice to his member firm that his involvement in an outside business activity exceeded his prior disclosure and for causing his firm to maintain inaccurate books and records.

Moore disclosed to the firm that he was an officer of a non-profit that sponsored youth sports activities and that his activities related to furthering the non-profit's mission of providing children with sports equipment, apparel, and league sponsorships. However, Moore later expanded the scope of his activities for the non-profit by soliciting firm customers to establish donor-advised funds to be operated by the non-profit. This expansion significantly changed the nature of his involvement and should have been disclosed to the firm.

Additionally, Moore caused his firm to maintain inaccurate books and records by adding information to documents after obtaining customer signatures. After sending blank documents to firm customers for signatures, Moore, with the customers' knowledge, completed the documents before submitting them to the firm. These documents included address/email change request forms, new account forms, securities purchase agreements, and wire authorization forms, including for a customer with disabilities that made it difficult to complete forms. While none of the customers complained and none of the transactions were unauthorized, this practice created inaccurate records that did not reflect the actual state of the documents when signed.

This case illustrates the importance of providing complete and timely disclosures to firms about outside business activities and maintaining accurate books and records. The four-month suspension, in effect from July 15, 2024, through November 14, 2024, reflects the seriousness of these violations.

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According to FINRA, John Wigmore Reilly III 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 $31,675.14 plus interest in deferred restitution to customers on July 9, 2024.

Reilly willfully violated the ...

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According to FINRA, John Wigmore Reilly III 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 $31,675.14 plus interest in deferred restitution to customers on July 9, 2024.

Reilly willfully violated the Care Obligation of Regulation Best Interest by recommending and effecting short-term switches of Class A mutual funds, which are generally intended to be held long-term, in two senior customers' accounts, without having a reasonable basis to believe that his recommendations were suitable or in his customers' best interest. As a result of this conduct, the customers paid $40,972.50 in excessive sales fees. The amount of restitution being paid to customers is equal to the total sales fees paid by customers less the amount of restitution paid to customers by Reilly's member firm.

Class A mutual fund shares typically carry front-end sales charges (loads) that are designed to be amortized over a long holding period. When these shares are sold shortly after purchase and replaced with other Class A shares, customers pay additional front-end loads that would not have been necessary had the initial investment been held or had a different share class been used for short-term holdings.

Regulation Best Interest requires broker-dealers to act in the best interest of retail customers when making recommendations, including considering the costs and risks of the recommendation and whether there are any conflicts of interest. Short-term switching of Class A mutual funds generates additional commissions for the representative but harms customers by subjecting them to excessive fees that erode their investment returns.

The three-month suspension, in effect from July 15, 2024, through October 14, 2024, reflects the seriousness of violating Reg BI, particularly when it results in harm to senior customers. Investors should understand their investment time horizon and ensure that the share class and investment strategy recommended by their financial professional aligns with their goals and minimizes unnecessary costs.

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According to FINRA, Robert Torres was suspended from association with any FINRA member in all capacities for two months on July 11, 2024, for willfully failing to timely amend his Form U4 to disclose that he had been charged with a felony. In light of Torres' financial status, no monetary sanction w...

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According to FINRA, Robert Torres was suspended from association with any FINRA member in all capacities for two months on July 11, 2024, for willfully failing to timely amend his Form U4 to disclose that he had been charged with a felony. In light of Torres' financial status, no monetary sanction was imposed.

After being arrested, a document was filed charging Torres with Aggravated Assault, a Third Degree Felony, and Criminal Mischief, a Class B Misdemeanor. Torres states that he received both documents; however, he failed to amend his Form U4 within 30 days of learning about the charges and only reported them approximately two-and-a-half months later. All charges against Torres were subsequently dismissed.

Form U4 is the uniform application for securities industry registration that must be filed by individuals seeking to engage in the securities business. It requires disclosure of various background information, including criminal charges and convictions. FINRA rules require registered persons to promptly update their Form U4 when certain events occur, including being charged with any felony or certain misdemeanors. This requirement exists to ensure that firms and investors have current and accurate information about the backgrounds of registered representatives.

The requirement to disclose criminal charges applies regardless of the ultimate disposition of the charges. Even though all charges against Torres were ultimately dismissed, he was still required to disclose them within 30 days of being charged. The willful failure to make timely disclosures undermines the integrity of the registration system and prevents firms from properly supervising their representatives.

The two-month suspension, in effect from August 19, 2024, through October 18, 2024, demonstrates that prompt and accurate disclosure is a fundamental obligation. Investors can review the disclosure information for any registered representative through FINRA's BrokerCheck system.

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According to FINRA, Ron Yehuda Itin was suspended from association with any FINRA member in any principal capacity for three months on July 12, 2024, and required to requalify by examination as a General Securities Principal. In light of Itin's financial status, no monetary sanction was imposed.

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According to FINRA, Ron Yehuda Itin was suspended from association with any FINRA member in any principal capacity for three months on July 12, 2024, and required to requalify by examination as a General Securities Principal. In light of Itin's financial status, no monetary sanction was imposed.

Itin failed to establish and implement a supervisory system reasonably designed to detect and prevent fraudulent fund transmittals and identity theft. As his member firm's designated person responsible for establishing, maintaining, and enforcing its supervisory systems, Itin failed to reasonably design the firm's supervisory system and written supervisory procedures to achieve compliance with the firm's regulatory obligations.

The firm's procedures were generic and were not tailored to the firm's business. When the firm began receiving trading instructions and withdrawal requests from a customer's email address sent by hackers who had gained unauthorized access to it, Itin was aware of these communications and knew that the registered representative servicing the account had not spoken with the customer to confirm the authenticity of those instructions. Itin also knew that the representative was concerned about a possible email hack.

Despite numerous red flags, including the hackers' refusal to contact the firm via telephone to verify the requested transactions and their insistence that the firm accept order and wire instructions by email only, Itin reviewed and approved multiple request forms submitted by the hackers without ever speaking to or communicating with the customer through any method other than the hacked email account. As a consequence, the hackers were able to transfer nearly the full value of the account to outside bank accounts that they controlled, causing the majority of funds in the account to be stolen.

The three-month suspension, in effect from July 15, 2024, through October 14, 2024, underscores the critical importance of proper supervision and responding appropriately to red flags of potential fraud.

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According to FINRA, Diptes Basu was assessed a deferred fine of $5,000 and suspended from association with any FINRA member in all capacities for one month on July 17, 2024, for soliciting and receiving exam content before taking the Certified Financial Planner examination and sharing exam content a...

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According to FINRA, Diptes Basu was assessed a deferred fine of $5,000 and suspended from association with any FINRA member in all capacities for one month on July 17, 2024, for soliciting and receiving exam content before taking the Certified Financial Planner examination and sharing exam content after taking it, all in violation of the CFP Board testing rules.

Basu had agreed to abide by the CFP's Pathway Agreement, which prohibited exam misconduct before, during, and after exam administration. However, prior to taking the exam, Basu solicited and received information regarding exam content on a group messaging platform from individuals who had already taken the exam. Subsequently, after taking and passing the exam, Basu shared the exam content with other individuals on the platform who planned to take the exam.

The CFP Board's Disciplinary and Ethics Commission found that Basu's actions constituted exam misconduct and violated the Pathway Agreement. The Commission imposed a five-year bar on Basu from applying for or obtaining the CFP certification and voided his exam results. FINRA's action was in addition to the sanctions imposed by the CFP Board.

Professional certifications like the CFP designation are intended to demonstrate that an individual has mastered a body of knowledge and met certain standards. The integrity of these certifications depends on the security and fairness of the examination process. Soliciting exam content before taking the exam and sharing it afterward undermines the certification's credibility and gives unfair advantages to those who cheat.

The one-month suspension, which was in effect from August 5, 2024, through September 4, 2024, reflects the seriousness of exam misconduct. Investors should understand that professional designations should represent genuine competence and ethical conduct, and those who obtain or maintain designations through dishonest means face consequences from both certifying organizations and securities regulators.

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