Bad Brokers

According to FINRA, Mark W. Manning (CRD #2599852) of Salt Point, New York, was barred from the securities industry in all capacities on March 26, 2024. The bar resulted from Manning's refusal to provide documents and information requested by FINRA during an investigation in Case #2023079710301. The...

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According to FINRA, Mark W. Manning (CRD #2599852) of Salt Point, New York, was barred from the securities industry in all capacities on March 26, 2024. The bar resulted from Manning's refusal to provide documents and information requested by FINRA during an investigation in Case #2023079710301. The investigation was initiated following a Form U5 filing that disclosed Manning had been discharged by his member firm for accepting beneficiary and power of attorney (POA) designations from a client and for acting as the client's power of attorney without obtaining the required approval from his firm. Accepting beneficiary designations and power of attorney authority from clients is a practice that creates severe conflicts of interest and is prohibited or strictly regulated by virtually all broker-dealer firms. When a financial professional is named as a beneficiary of a client's account or is granted power of attorney over a client's financial affairs, the professional's personal financial interests become directly intertwined with the client's accounts, creating an inherent conflict that can lead to exploitation or abuse. Most firms require prior written approval before a registered representative may accept any such designation, and many firms prohibit the practice entirely except in cases involving immediate family members. FINRA Rule 3241 specifically addresses the holding of customer accounts by registered persons and imposes requirements for disclosure and firm approval. Manning's failure to obtain firm approval for these designations suggests that the arrangements may not have been subject to the compliance oversight that would normally apply, potentially leaving the affected customer vulnerable to financial harm. Manning's refusal to cooperate with FINRA's investigation by providing requested documents and information constituted a violation of FINRA Rules 8210 and 2010, resulting in the imposition of a bar in all capacities. Investors should be cautious about granting power of attorney or naming their financial advisor as a beneficiary on any account. These arrangements should always involve independent legal counsel and should be disclosed to and approved by the broker's firm to ensure proper oversight.

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According to FINRA, Sidney Lebental (CRD #5543658) of New York, New York, was barred from the securities industry in any capacity on March 27, 2024, pursuant to an Order Accepting Offer of Settlement in FINRA Case #2019063152202. This case stands apart from the other barring actions in this report b...

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According to FINRA, Sidney Lebental (CRD #5543658) of New York, New York, was barred from the securities industry in any capacity on March 27, 2024, pursuant to an Order Accepting Offer of Settlement in FINRA Case #2019063152202. This case stands apart from the other barring actions in this report because it was based on substantive findings of fraudulent trading activity rather than a refusal to cooperate with an investigation. FINRA found that Lebental engaged in spoofing, a form of market manipulation involving the use of non-bona fide orders to create a false appearance of supply or demand in the market. Specifically, Lebental traded as a market maker in U.S. Treasury Bonds and entered large non-bona fide orders designed to create a false appearance of market depth. These fraudulent orders were typically cancelled within one to three seconds of being placed, a hallmark of spoofing activity. The orders were never intended to be executed; their sole purpose was to mislead other market participants about the true state of supply and demand, thereby allowing Lebental to obtain more favorable prices on his genuine trades. In addition to the spoofing activity, FINRA found that Lebental caused the publication of non-bona fide quotations and acted in bad faith and in an unethical manner. Spoofing is a violation of FINRA Rules 5210 (publication of transactions and quotations), 6140 (other trading practices), and 2010 (standards of commercial honor). It is also prohibited under federal securities law, including the Dodd-Frank Act, which specifically outlawed spoofing in 2010. Spoofing undermines the integrity of financial markets by distorting the price discovery process that all investors rely upon. When market participants cannot trust that the orders displayed in the market represent genuine trading interest, it erodes confidence in the fairness of the market and can result in investors receiving worse prices on their transactions. The U.S. Treasury Bond market is particularly important because it serves as the benchmark for interest rates across the global economy. Investors should understand that market manipulation, including spoofing, harms all market participants by corrupting the pricing information that investors and institutions rely on to make informed decisions.

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According to FINRA, Douglas J. Bauerband (CRD #2850269), a registered representative based in Toms River, New Jersey, was fined $5,000 (deferred) and suspended for one month after consenting to findings that he engaged in outside business activities without proper disclosure or approval from his mem...

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According to FINRA, Douglas J. Bauerband (CRD #2850269), a registered representative based in Toms River, New Jersey, was fined $5,000 (deferred) and suspended for one month after consenting to findings that he engaged in outside business activities without proper disclosure or approval from his member firms. FINRA's investigation revealed that Bauerband assisted an estate executor with the settlement and distribution of estate assets, for which he received compensation totaling $18,000. Under FINRA rules, registered representatives are required to promptly disclose all outside business activities to their employing member firms so that the firms can evaluate whether such activities could create conflicts of interest or otherwise harm investors. Bauerband failed to meet this fundamental obligation. Compounding the violation, Bauerband falsely attested on a compliance questionnaire that he had disclosed all of his outside business activities, when in fact he had not. Compliance questionnaires are a critical tool that broker-dealers use to monitor their representatives' conduct, and false attestations undermine the entire supervisory framework designed to protect investors. This case highlights the importance of transparency requirements in the securities industry. Outside business activities are not automatically prohibited, but they must be disclosed so that firms can assess potential conflicts and ensure that customers are not disadvantaged. When brokers conceal these activities, it raises serious questions about what other information they may be withholding. Investors should be aware that their financial professionals are required to be forthcoming about all business activities, and that FINRA actively investigates and sanctions those who fail to comply. The suspension was in effect from March 4, 2024, through April 3, 2024, during which time Bauerband was barred from associating with any FINRA member firm in any capacity. This matter was resolved through FINRA Case #2023079298201.

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According to FINRA, Lawrence Richard Brockman (CRD #1126810), a registered representative based in Girard, Ohio, was fined $20,000 (deferred) and suspended for 22 months after consenting to findings that he borrowed $22,500 from a customer for personal expenses without notifying or receiving approva...

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According to FINRA, Lawrence Richard Brockman (CRD #1126810), a registered representative based in Girard, Ohio, was fined $20,000 (deferred) and suspended for 22 months after consenting to findings that he borrowed $22,500 from a customer for personal expenses without notifying or receiving approval from his member firm. FINRA rules strictly regulate borrowing arrangements between registered representatives and their customers because such transactions carry inherent risks of exploitation, particularly when the broker holds a position of trust and influence over the customer's financial affairs. Brockman's conduct was especially concerning because of the deliberate steps he took to conceal the loan. Rather than receiving the funds directly, Brockman had the customer send the loan proceeds to his wife's checking account, effectively hiding the transaction from his firm's compliance oversight. There was no written loan agreement memorializing the terms of the borrowing arrangement, which further violated industry standards that require proper documentation when borrowing from customers is permitted at all. Brockman also falsely attested on compliance questionnaires that he had not engaged in any prohibited borrowing activities. After the customer passed away, Brockman had made only $2,076 in payments toward the $22,500 loan and refused to make any further payments, leaving the customer's estate with a significant unrecovered loss. This pattern of behavior demonstrated a disregard for the rules designed to protect investors from financial exploitation by their trusted advisors. The length of Brockman's 22-month suspension, running from March 4, 2024, through January 3, 2026, reflects the severity of the misconduct. Investors should understand that borrowing money from customers is one of the most closely regulated activities in the brokerage industry, and brokers who engage in concealment of such transactions face serious disciplinary consequences. This matter was resolved through FINRA Case #2022076528901.

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According to FINRA, Joshua R. Cook (CRD #4277525), a registered representative based in Vernal, Utah, was fined $7,500 (deferred) and suspended for 10 months after consenting to findings that he electronically signed customer names on account documents without obtaining prior written permission from...

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According to FINRA, Joshua R. Cook (CRD #4277525), a registered representative based in Vernal, Utah, was fined $7,500 (deferred) and suspended for 10 months after consenting to findings that he electronically signed customer names on account documents without obtaining prior written permission from those customers, including senior investors. The documents on which Cook affixed customer signatures without authorization included new account applications, money transfer forms, and IRA-related forms. While FINRA acknowledged that the underlying transactions were authorized by the customers and that no customer complaints were filed, the act of signing another person's name on official financial documents is a serious violation that undermines the integrity of the recordkeeping systems that regulators and firms rely on to protect investors. Cook's actions caused his member firm to maintain inaccurate books and records, a violation of FINRA Rules and Securities Exchange Act requirements. Accurate recordkeeping is foundational to securities regulation because it allows firms, regulators, and auditors to verify that transactions were properly authorized and executed in accordance with customer instructions. When brokers sign customer names on documents, even with good intentions, it becomes impossible to verify the authenticity of those authorizations after the fact. Cook further compounded the issue by falsely attesting on compliance questionnaires that he had not engaged in any such conduct. This false certification prevented his firm from identifying and addressing the problem through its normal supervisory channels. The 10-month suspension, effective from March 4, 2024, through January 3, 2025, reflects the seriousness with which FINRA treats document falsification, even in cases where no direct customer harm resulted. Investors, particularly seniors who may be more vulnerable, should know that their signatures on financial documents carry legal significance, and that regulators actively enforce rules against unauthorized signing practices. This matter was resolved through FINRA Case #2022074655901.

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According to FINRA, Stephen Frank Grande (CRD #2838265), a registered representative based in North Massapequa, New York, was fined $5,000 and suspended for one month after consenting to findings that he falsely certified to the State of New York that he personally completed 15 hours of continuing e...

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According to FINRA, Stephen Frank Grande (CRD #2838265), a registered representative based in North Massapequa, New York, was fined $5,000 and suspended for one month after consenting to findings that he falsely certified to the State of New York that he personally completed 15 hours of continuing education required for his insurance license renewal, when in fact another person had completed the coursework on his behalf. Continuing education requirements exist to ensure that financial professionals maintain current knowledge of products, regulations, and best practices relevant to serving their clients. These requirements are a fundamental component of the licensing framework that protects consumers by helping to ensure that the individuals entrusted with their financial affairs possess adequate and up-to-date expertise. By having someone else complete his continuing education and then certifying to the state that he had done so personally, Grande undermined the purpose of these educational mandates and made a false statement to a state regulatory authority. This type of misconduct raises legitimate concerns about a representative's commitment to maintaining the professional competence that investors have a right to expect from their financial advisors. FINRA takes false certifications seriously because they represent a form of dishonesty that goes to the heart of a representative's fitness to serve in a position of trust. If a broker is willing to misrepresent his own qualifications to a state regulator, investors may reasonably question what other representations that broker might be willing to make dishonestly. The suspension was in effect from April 1 through April 30, 2024, during which time Grande was prohibited from associating with any FINRA member firm. Investors should be aware that their financial professionals are subject to ongoing education requirements, and that regulators actively enforce compliance with these standards. This matter was resolved through FINRA Case #2023079740101.

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According to FINRA, Thomas Bradley Kintz (CRD #2667817), a registered representative based in Atlantis, Florida, was fined $7,500 and suspended for two months after consenting to findings that he exercised discretion in customer accounts involving exchange traded products without first obtaining pri...

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According to FINRA, Thomas Bradley Kintz (CRD #2667817), a registered representative based in Atlantis, Florida, was fined $7,500 and suspended for two months after consenting to findings that he exercised discretion in customer accounts involving exchange traded products without first obtaining prior written authorization from the customers or receiving his firm's approval to exercise such discretion. The accounts in question belonged to relatives of Kintz, and FINRA found that he did not speak with these customers on the days he executed the trades. Additionally, Kintz used an unapproved communication channel in connection with his activities. Under FINRA rules and securities regulations, a broker must obtain specific written authorization from a customer before exercising discretion over that customer's account, meaning the broker cannot make trading decisions on the customer's behalf without explicit prior consent documented in writing. The broker's firm must also approve the arrangement and supervise the discretionary trading activity. These requirements exist because discretionary authority gives a broker significant power over a customer's assets, creating the potential for abuse, excessive trading, or trades that do not align with the customer's investment objectives and risk tolerance. Even when the account holders are family members, the rules apply equally because FINRA's regulatory framework is designed to protect all investors regardless of their relationship to the broker. The use of an unapproved communication channel compounded the violation by circumventing the firm's ability to supervise Kintz's communications with customers, which is another critical investor protection mechanism. The suspension was in effect from March 18 through May 17, 2024. Investors should understand that they have the right to be consulted before trades are made in their accounts unless they have specifically authorized discretionary trading in writing. This matter was resolved through FINRA Case #2021069196401.

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According to FINRA, Joseph C. Desapio (CRD #5837553), a registered representative based in New York, New York, was suspended for 15 months after consenting to findings that he violated FINRA's Suitability Rule and Regulation Best Interest (Reg BI) by recommending quantitatively unsuitable trades in ...

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According to FINRA, Joseph C. Desapio (CRD #5837553), a registered representative based in New York, New York, was suspended for 15 months after consenting to findings that he violated FINRA's Suitability Rule and Regulation Best Interest (Reg BI) by recommending quantitatively unsuitable trades in customer accounts, including the account of a senior investor. No monetary sanction was imposed due to Desapio's demonstrated financial inability to pay. FINRA's investigation found that Desapio exercised de facto control over customer accounts, meaning he effectively directed trading activity even without formal discretionary authority. The trading in these accounts exhibited excessively high turnover rates and cost-to-equity ratios, both of which are key metrics regulators use to identify potentially abusive trading patterns. Quantitative unsuitability, sometimes called excessive trading or churning, occurs when a broker engages in a level of trading activity that is so excessive that it is virtually impossible for the customer to profit after accounting for commissions and other transaction costs. In Desapio's case, the trading activity generated $136,023 in total trading costs, including $111,798 in commissions for Desapio, while causing customers to suffer $92,546 in realized losses. This pattern demonstrates that the primary beneficiary of the trading was Desapio himself, not his customers. In addition to the unsuitable trading, Desapio borrowed $20,000 from a customer without obtaining his firm's approval, a separate serious violation of FINRA rules governing financial dealings between brokers and their customers. The 15-month suspension, running from March 18, 2024, through June 17, 2025, reflects the gravity of the combined violations. Investors should be vigilant about monitoring the frequency of trading in their accounts and the commissions being generated. Excessive trading that enriches the broker at the customer's expense is a serious regulatory violation, and investors who experience such activity may have recourse through FINRA's arbitration process. This matter was resolved through FINRA Case #2022074025801.

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According to FINRA, Sean Jeffrey Fields (CRD #6190319), a registered representative based in Antioch, California, was fined $5,000 (deferred) and suspended for six months after consenting to findings that he borrowed a total of $55,000 from two customers without providing notice to or receiving appr...

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According to FINRA, Sean Jeffrey Fields (CRD #6190319), a registered representative based in Antioch, California, was fined $5,000 (deferred) and suspended for six months after consenting to findings that he borrowed a total of $55,000 from two customers without providing notice to or receiving approval from his member firm. FINRA rules strictly regulate borrowing arrangements between brokers and customers because of the inherent conflict of interest and potential for exploitation. The first loan included an oral agreement for 12% interest, and Fields was making repayments on that obligation. However, the second loan was entirely undocumented and had not been repaid, leaving that customer without any written evidence of the debt or its terms. Fields further violated FINRA rules by settling a customer complaint without his firm's knowledge. He entered into a written settlement agreement with one of the customers for $15,000 in principal plus $3,000 in interest, which included a mutual release and a confidentiality provision. FINRA rules explicitly prohibit registered representatives from settling customer complaints on their own because firms must be aware of all complaints and settlements to fulfill their supervisory obligations and their regulatory reporting requirements. The inclusion of a confidentiality provision is particularly problematic because it could prevent the customer from cooperating with regulators or sharing information that might protect other investors. These multiple violations demonstrate a pattern of operating outside the boundaries of firm supervision and regulatory oversight. The six-month suspension, running from March 18 through September 17, 2024, was designed to address the seriousness of these combined infractions. Investors should understand that they have the right to file complaints through proper channels and should be cautious about entering into private settlement agreements with their brokers that include confidentiality provisions, as such agreements may not serve their best interests. This matter was resolved through FINRA Case #2023079664201.

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According to FINRA, Darrell W. Layman (CRD #4372889), a registered representative based in Cuba, Missouri, was fined $5,000 (deferred) and suspended for four months after consenting to findings that he electronically signed customer names on account documents, including two instances where he did so...

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According to FINRA, Darrell W. Layman (CRD #4372889), a registered representative based in Cuba, Missouri, was fined $5,000 (deferred) and suspended for four months after consenting to findings that he electronically signed customer names on account documents, including two instances where he did so without obtaining prior permission from the customers. The documents on which Layman affixed unauthorized signatures included new account applications, transfer forms, and certifications of trust. While FINRA noted that the underlying transactions were authorized by the customers and that no customer complaints were filed, the unauthorized signing of customer names on financial documents constitutes a serious regulatory violation regardless of whether direct customer harm resulted. Layman's actions caused his member firm to maintain inaccurate books and records, which is a violation of both FINRA rules and the Securities Exchange Act of 1934. The integrity of financial recordkeeping is a cornerstone of investor protection. When account documents bear signatures that were not actually applied by the customers whose names appear on them, it becomes impossible for the firm, its compliance department, or regulators to verify that proper authorization was obtained for the transactions in question. Layman also falsely attested on compliance questionnaires that he had not engaged in any unauthorized signing of customer documents. These false attestations are themselves a separate violation and represent a failure of the self-reporting mechanisms that firms depend on to maintain adequate supervision of their representatives. The four-month suspension, effective from March 18 through July 17, 2024, underscores the importance FINRA places on document integrity and honest compliance reporting, even in situations where no customer suffered a financial loss. Investors should know that their signatures on financial documents carry legal significance, and that regulators take unauthorized signing practices seriously as a matter of market integrity. This matter was resolved through FINRA Case #2022077093901.

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