Bad Brokers

According to FINRA, registered representative Daniel VanSkiver (CRD #4255472) of Ada, Michigan, was sanctioned with a deferred fine of $5,000 and suspended for two months from associating with any FINRA member firm in all capacities. This action, resolved through an Acceptance, Waiver, and Consent (...

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According to FINRA, registered representative Daniel VanSkiver (CRD #4255472) of Ada, Michigan, was sanctioned with a deferred fine of $5,000 and suspended for two months from associating with any FINRA member firm in all capacities. This action, resolved through an Acceptance, Waiver, and Consent (AWC) agreement effective April 4, 2024, was filed under FINRA Case #2022076282401.

VanSkiver was found in violation of FINRA rules after he falsified the electronic signatures of customers, including senior investors, on various account documents. These documents included new account applications and move money forms — records that are essential to accurately reflecting a customer's intentions and authorizations. By forging these signatures, VanSkiver bypassed the fundamental requirement that customers knowingly and voluntarily consent to transactions and account changes involving their money.

In addition to the signature falsification, VanSkiver falsely attested in compliance questionnaires that his conduct was in accordance with firm policies and regulatory requirements. These questionnaires are internal compliance tools designed to help firms detect and prevent misconduct. By providing false answers, VanSkiver not only concealed his own wrongdoing but also caused his member firm to maintain inaccurate books and records, a violation of securities regulations that require firms to keep accurate documentation of all customer-related activities.

The involvement of senior customers in this case is particularly concerning. Regulators including FINRA have placed heightened emphasis on the protection of senior investors, who may be more vulnerable to exploitation and financial harm. The falsification of signatures on accounts belonging to elderly customers represents a serious breach of the trust that these individuals place in their financial professionals.

For investors, this case underscores the importance of carefully reviewing all account documents and statements. Customers should verify that any signatures appearing on their account records are genuinely their own and that all transactions reflected on their statements were properly authorized. If a customer discovers unauthorized signatures or unfamiliar transactions, they should immediately contact their brokerage firm's compliance department and consider filing a complaint with FINRA. Vigilance in reviewing account documentation remains one of the most effective ways for investors to protect themselves from misconduct.

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According to FINRA, registered representative Sanford Jay Cohen (CRD #1509386) of Melville, New York, was fined $5,000 and suspended for one month from associating with any FINRA member firm in all capacities. This disciplinary action was resolved through an Acceptance, Waiver, and Consent (AWC) agr...

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According to FINRA, registered representative Sanford Jay Cohen (CRD #1509386) of Melville, New York, was fined $5,000 and suspended for one month from associating with any FINRA member firm in all capacities. This disciplinary action was resolved through an Acceptance, Waiver, and Consent (AWC) agreement effective April 5, 2024, and was filed under FINRA Case #2023079717201.

Cohen was found in violation of FINRA rules after he certified to the New York State Department of Financial Services that he had personally completed 15 hours of required continuing education coursework. FINRA's investigation determined that another person had actually completed the continuing education requirements on Cohen's behalf. This false certification constituted a misrepresentation of his compliance with mandatory state professional development requirements.

Continuing education programs in the securities industry are not mere formalities. They are regulatory safeguards designed to ensure that licensed professionals remain knowledgeable about current laws, regulations, products, and ethical standards. The New York State Department of Financial Services, like regulators in other states, imposes these requirements to protect consumers and maintain the integrity of the financial services profession. When a broker arranges for someone else to fulfill these obligations, it defeats the educational purpose of the requirement and raises serious concerns about the broker's commitment to professional competence.

This case is part of a broader pattern identified by FINRA in which multiple New York-based registered representatives were found to have had others complete their continuing education on their behalf. The fact that FINRA pursued enforcement actions in each of these cases demonstrates the regulator's commitment to holding individual brokers accountable for their personal compliance obligations, even in matters that may seem administrative in nature.

For investors, this case reinforces the value of conducting due diligence on financial professionals. FINRA's BrokerCheck database provides free access to the disciplinary history and professional background of registered brokers and firms. Investors are encouraged to use this resource both before establishing a relationship with a financial professional and on an ongoing basis. A broker's willingness to misrepresent compliance with basic regulatory requirements may reflect broader shortcomings in their professional conduct and ethical judgment that could ultimately affect the quality of financial advice they provide.

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According to FINRA, registered representative Robert Spaulding Gleason Jr. (CRD #1415067) of Owensboro, Kentucky, was sanctioned with a deferred fine of $5,000 and suspended for three months from associating with any FINRA member firm in all capacities. This disciplinary action was resolved through ...

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According to FINRA, registered representative Robert Spaulding Gleason Jr. (CRD #1415067) of Owensboro, Kentucky, was sanctioned with a deferred fine of $5,000 and suspended for three months from associating with any FINRA member firm in all capacities. This disciplinary action was resolved through an Acceptance, Waiver, and Consent (AWC) agreement effective April 5, 2024, under FINRA Case #2021069335701.

Gleason was found to have willfully violated the Regulation Best Interest (Reg BI) Best Interest Obligation by recommending an excessive number of transactions in a retail customer's account. The affected customer was in their early sixties with an annual income of approximately $50,000 and a liquid net worth of approximately $700,000. Over the course of just 11 months, the customer paid more than $28,000 in commissions as a result of Gleason's trading recommendations. This level of trading activity was determined to be excessive and inconsistent with the customer's financial profile and investment objectives.

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 securities recommendations. The regulation established a clear standard that brokers must not place their own financial interests ahead of those of their customers. Excessive trading, sometimes referred to as churning, is one of the most direct ways a broker can violate this obligation, as it generates commissions for the broker while eroding the customer's investment returns.

The fact that Gleason's violation was deemed willful is significant. A willful violation indicates that the conduct was intentional rather than inadvertent, which can carry additional regulatory consequences, including potential statutory disqualification from the securities industry. In this case, the three-month suspension reflects the seriousness with which FINRA treats violations of Reg BI's core investor protection provisions.

For investors, this case illustrates the importance of monitoring trading activity and associated costs in their accounts. Customers should regularly review their account statements and question any transactions they did not specifically authorize or that seem inconsistent with their stated investment goals. If commissions or fees appear unusually high relative to account size, investors should seek clarification from their broker and consider raising concerns with the firm's compliance department or filing a complaint with FINRA.

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According to FINRA, registered representative Cynthia S. Beyerlein (CRD #4320421) of Narvon, Pennsylvania, was suspended for eight months from associating with any FINRA member firm in all capacities. No monetary sanction was imposed due to Beyerlein's demonstrated financial hardship. This action wa...

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According to FINRA, registered representative Cynthia S. Beyerlein (CRD #4320421) of Narvon, Pennsylvania, was suspended for eight months from associating with any FINRA member firm in all capacities. No monetary sanction was imposed due to Beyerlein's demonstrated financial hardship. This action was resolved through an Acceptance, Waiver, and Consent (AWC) agreement effective April 8, 2024, under FINRA Case #2022076420001.

Beyerlein was found in violation of FINRA Rule 3240, which governs borrowing and lending arrangements between registered representatives and their customers. She borrowed approximately $190,000 from a customer through multiple loan transactions without providing written notice to her member firm or obtaining the firm's approval. The customer from whom she borrowed was not an immediate family member and was not in the business of lending money, which meant this arrangement did not qualify for any of the limited exceptions to the rule's requirements.

Additionally, the loans between Beyerlein and her customer were not memorialized in writing. FINRA Rule 3240 requires that any permissible borrowing arrangement between a registered person and a customer be based on a written agreement that clearly sets forth the terms of the loan. The absence of written documentation in this case compounded the regulatory violation and left the customer without formal protections regarding repayment terms, interest, and other critical loan conditions.

FINRA's prohibition on undisclosed borrowing from customers exists because such arrangements create inherent conflicts of interest. A broker who owes money to a customer may be tempted to manage the customer's account in ways that serve the broker's financial interests rather than the customer's. The power dynamic between a financial advisor and their client can also make it difficult for the customer to refuse a loan request or to pursue repayment aggressively.

For investors, this case is a cautionary example of the risks associated with personal financial dealings with brokers. Customers should be wary of any request from a financial professional to borrow money, regardless of the reason given. Such requests should be reported to the firm's compliance department. Investors should understand that FINRA rules strictly regulate these arrangements precisely because of the potential for abuse and financial harm to customers.

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According to FINRA, registered representative Charles Scott Burford (CRD #1658201) of Dallas, Texas, was fined $10,000 and suspended for six months from associating with any FINRA member firm in all capacities pursuant to a National Adjudicatory Council (NAC) decision issued April 12, 2024, under FI...

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According to FINRA, registered representative Charles Scott Burford (CRD #1658201) of Dallas, Texas, was fined $10,000 and suspended for six months from associating with any FINRA member firm in all capacities pursuant to a National Adjudicatory Council (NAC) decision issued April 12, 2024, under FINRA Case #2019064656601. It is important to note that this decision has been appealed to the Securities and Exchange Commission (SEC), and the sanctions are not in effect pending the completion of that review.

Burford is accused of executing unauthorized trades and facilitating unauthorized withdrawals from a deceased customer's brokerage account. According to the NAC decision, Burford acted on instructions from the customer's widow to conduct transactions in the account after the customer's death. The unauthorized activity included nine securities sales totaling $129,972.03 and eight withdrawals totaling $84,669.87. Additionally, Burford allegedly failed to submit the customer's death certificate to his firm for approximately 14 months, which allowed the unauthorized transactions to continue without detection by the firm's compliance systems.

When an account holder dies, the brokerage account is generally frozen pending proper legal authorization for any subsequent activity. Trades and withdrawals should not occur until the firm has received proper documentation, such as a death certificate and letters testamentary or letters of administration from a probate court, authorizing a named executor or administrator to act on behalf of the estate. By executing transactions on the instructions of someone who had no documented legal authority over the account, Burford allegedly bypassed these critical safeguards.

Because this matter is currently on appeal to the SEC, the sanctions imposed by the NAC are stayed and Burford has not yet been required to pay the fine or serve the suspension. The SEC will conduct an independent review of the case and may affirm, modify, or reverse the NAC's decision.

For investors, this case highlights the importance of estate planning as it relates to brokerage accounts. Account holders should ensure that their estate documents clearly designate who has authority to manage their financial accounts upon death. Beneficiaries and surviving family members should work directly with the brokerage firm's estate services department and provide all required legal documentation before attempting to access or transact in a deceased person's account.

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According to FINRA, registered representative Christopher Joseph McCoy (CRD #4113108) of Fairfield, Connecticut, was sanctioned with a deferred fine of $5,000 and suspended for one month from associating with any FINRA member firm in all capacities. This action was resolved through an Acceptance, Wa...

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According to FINRA, registered representative Christopher Joseph McCoy (CRD #4113108) of Fairfield, Connecticut, was sanctioned with a deferred fine of $5,000 and suspended for one month from associating with any FINRA member firm in all capacities. This action was resolved through an Acceptance, Waiver, and Consent (AWC) agreement effective April 16, 2024, under FINRA Case #2020067072101.

McCoy was found in violation of FINRA rules after he exercised discretion in customer accounts without obtaining the required written authorization from the customers or permission from his member firm. Several of the affected customers were senior investors, a population that regulators have identified as particularly vulnerable to potential abuse in the securities industry. Discretionary trading authority allows a broker to make investment decisions — including what to buy or sell, how much, and when — without obtaining the customer's prior approval for each individual transaction. Because this authority gives the broker significant control over a customer's assets, FINRA rules require that it be granted only through formal written authorization and accepted by the firm.

Compounding this violation, McCoy falsely attested in compliance questionnaires that he had not exercised discretionary trading authority in any customer accounts. These internal compliance certifications are a key tool that firms use to monitor their representatives' activities and ensure adherence to regulatory requirements. By providing false information in these questionnaires, McCoy undermined his firm's compliance oversight and concealed his unauthorized activities from supervisory review.

The exercise of unauthorized discretion is a serious regulatory concern because it removes the customer from the decision-making process regarding their own investments. Without proper authorization and firm oversight, there is an elevated risk that trades may not align with the customer's investment objectives, risk tolerance, or financial situation. When senior investors are involved, these concerns are amplified due to factors such as fixed income dependency, shorter investment time horizons, and potential cognitive vulnerabilities.

For investors, this case is a reminder to carefully review all account agreements and understand what authority they have granted their broker. Customers who have not signed a written discretionary authorization should expect to be consulted before any trades are executed in their accounts. If a customer notices trades they did not authorize, they should promptly contact their firm and consider reporting the matter to FINRA.

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According to FINRA, registered representative Larry Joseph Michaels (CRD #4351477) of Lake Forest, California, was fined $10,000 and suspended for two months from associating with any FINRA member firm in all capacities. This action was resolved through an Acceptance, Waiver, and Consent (AWC) agree...

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According to FINRA, registered representative Larry Joseph Michaels (CRD #4351477) of Lake Forest, California, was fined $10,000 and suspended for two months from associating with any FINRA member firm in all capacities. This action was resolved through an Acceptance, Waiver, and Consent (AWC) agreement effective April 18, 2024, under FINRA Case #2020069057401.

Michaels was found in violation of FINRA rules on two separate grounds. First, he exercised discretionary authority in customer accounts without obtaining the required written authorization from the customers or acceptance from his member firm. FINRA rules mandate that before a broker can make trading decisions on behalf of a customer without prior approval for each transaction, the customer must provide explicit written consent and the firm must formally accept the discretionary arrangement. By trading on a discretionary basis without these safeguards in place, Michaels operated outside the bounds of his authorized activities and deprived his customers of essential protections.

Second, Michaels failed to provide his member firm with complete and accurate information about his outside business activities. Specifically, he did not disclose the full nature of his roles as a manager, consultant, and incorporator for clients of an accounting company. FINRA rules require registered representatives to promptly notify their firms of all outside business activities so that the firm can evaluate whether those activities create conflicts of interest or other compliance concerns. By failing to disclose these roles, Michaels prevented his firm from exercising appropriate supervisory oversight over his activities outside the firm.

The combination of unauthorized discretionary trading and undisclosed outside business activities represents a pattern of conduct in which a broker operates without proper oversight. When a firm is unaware of a representative's full range of activities, it cannot adequately supervise that individual or identify potential conflicts of interest that could harm customers. Discretionary trading without authorization compounds this problem by giving the broker unchecked control over customer assets.

For investors, this case highlights two important areas of concern. Customers should ensure that any discretionary trading arrangement is supported by signed written agreements and should verify with their firm that the arrangement has been formally approved. Additionally, investors should be aware that their broker may have business interests outside of their brokerage activities, and they should not hesitate to ask about potential conflicts of interest that could influence the advice they receive.

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According to FINRA, registered representative Justine Marie Cantafio (CRD #6158299) of Avoca, Pennsylvania, was sanctioned with a deferred fine of $7,500 and suspended for 12 months from associating with any FINRA member firm in all capacities. This action was resolved through an Acceptance, Waiver,...

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According to FINRA, registered representative Justine Marie Cantafio (CRD #6158299) of Avoca, Pennsylvania, was sanctioned with a deferred fine of $7,500 and suspended for 12 months from associating with any FINRA member firm in all capacities. This action was resolved through an Acceptance, Waiver, and Consent (AWC) agreement effective April 22, 2024, under FINRA Case #2022076531801.

Cantafio was found in violation of FINRA rules based on two categories of serious misconduct. First, she falsified life insurance applications and forged the electronic signatures of customers without their knowledge or consent. The falsification of insurance applications is a particularly grave offense because insurance contracts are legal agreements that depend on the accuracy of the information provided in the application. When a broker fabricates application data or signs documents on behalf of customers without authorization, it can result in policies that do not accurately reflect the customer's needs, health status, or financial circumstances. Customers may end up with coverage they did not request, or their beneficiaries may face claim denials if the insurer later discovers material misrepresentations in the application.

Second, Cantafio attempted to settle customer complaints away from her member firm by mailing personal checks to the complaining customers. FINRA rules require that customer complaints be reported to and handled through the broker's firm. This requirement exists to ensure that firms can properly investigate complaints, identify patterns of misconduct, and take corrective action. When a broker attempts to resolve complaints privately, it circumvents these protections and may allow ongoing misconduct to go undetected. Settling complaints away from the firm is also a red flag that the broker is aware their conduct was improper and is attempting to conceal it from supervisory review.

The 12-month suspension imposed in this case reflects the seriousness of these combined violations. Forging customer signatures and settling complaints away from a firm are both acts of deception that undermine the trust customers place in their financial professionals and the regulatory systems designed to protect them.

For investors, this case serves as an important reminder to carefully review all documents before and after signing, particularly insurance applications. Customers should verify that the information on any application accurately reflects what they discussed with their broker and should retain copies of all signed documents. If a broker offers to resolve a complaint by sending a personal payment, customers should be aware that this practice violates industry rules and should report it to the firm.

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According to FINRA, Tyler Miller (CRD #7686849) of Mequon, Wisconsin, was sanctioned with a deferred fine of $5,000 and suspended for 18 months from associating with any FINRA member firm in all capacities. This action was resolved through an Acceptance, Waiver, and Consent (AWC) agreement effective...

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According to FINRA, Tyler Miller (CRD #7686849) of Mequon, Wisconsin, was sanctioned with a deferred fine of $5,000 and suspended for 18 months from associating with any FINRA member firm in all capacities. This action was resolved through an Acceptance, Waiver, and Consent (AWC) agreement effective April 24, 2024, under FINRA Case #2024081090901.

Miller was found in violation of FINRA rules after he possessed unauthorized materials — specifically a cell phone — while taking the Securities Industry Essentials (SIE) exam via remote testing. The investigation revealed that Miller repeatedly accessed information on his cell phone during the course of the examination, despite having attested to follow the Rules of Conduct that govern the exam-taking process. These rules explicitly prohibit test-takers from possessing or using any unauthorized materials, including electronic devices, during the examination.

The SIE exam is a foundational qualification examination that tests a candidate's knowledge of basic securities industry concepts, including types of products, the structure of markets, regulatory agencies and their functions, and prohibited practices. It is a prerequisite for individuals seeking to enter the securities industry and serves as a baseline assessment of whether a candidate possesses the fundamental knowledge necessary to participate in the financial markets. The integrity of this examination process is essential to maintaining public confidence that the individuals who pass it have genuinely demonstrated the required level of competence.

Cheating on a securities qualification exam is treated as a serious regulatory matter because it undermines the entire licensing framework that protects investors. If individuals can obtain their credentials through dishonest means, the licensing system fails in its purpose of ensuring that only qualified individuals serve the investing public. The 18-month suspension imposed in this case — one of the longer suspensions in this group of disciplinary actions — reflects FINRA's strong stance on protecting examination integrity.

For investors, this case underscores the importance of the regulatory infrastructure that governs who is permitted to work in the securities industry. Licensing exams are a first line of defense in ensuring that financial professionals possess at least a minimum level of industry knowledge. Investors can verify whether their financial professional holds the appropriate licenses and has passed the required examinations through FINRA's BrokerCheck tool.

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According to FINRA, registered representative Matthew Joseph Mathesen (CRD #6781208) of Coram, New York, was fined $5,000 and suspended for one month from associating with any FINRA member firm in all capacities. This disciplinary action was resolved through an Acceptance, Waiver, and Consent (AWC) ...

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According to FINRA, registered representative Matthew Joseph Mathesen (CRD #6781208) of Coram, New York, was fined $5,000 and suspended for one month from associating with any FINRA member firm in all capacities. This disciplinary action was resolved through an Acceptance, Waiver, and Consent (AWC) agreement effective April 25, 2024, under FINRA Case #2023079727601.

Mathesen was found in violation of FINRA rules after he certified to the New York State Department of Financial Services that he had personally completed 15 hours of required continuing education coursework. However, FINRA's investigation determined that another individual had actually completed the continuing education requirements on his behalf. By submitting this false certification, Mathesen misrepresented his compliance with mandatory state professional development obligations designed to ensure that financial professionals remain competent and informed.

This case is one of several similar enforcement actions taken by FINRA against New York-based registered representatives who were found to have had others complete their state-mandated continuing education. The consistency of these enforcement actions demonstrates that FINRA actively monitors compliance with continuing education requirements and is prepared to impose meaningful sanctions — including both monetary fines and suspensions — against individuals who attempt to circumvent these obligations.

Continuing education in the financial services industry covers critical topics including updates to securities laws and regulations, changes to product offerings and market structures, ethical obligations, and best practices for serving customers. These programs are designed to keep financial professionals current with an industry that is constantly evolving. When brokers bypass these requirements, they may lack awareness of important regulatory developments or product risks that could directly affect the quality of advice they provide to their clients.

For investors, this case reinforces several important points. First, all regulatory actions — including those involving seemingly administrative violations like continuing education fraud — are documented on a broker's record and are accessible through FINRA's BrokerCheck system. Second, a pattern of dishonesty in any area of a broker's professional conduct can be a warning sign that warrants further scrutiny. Investors should consider the totality of a broker's disciplinary record when evaluating whether to entrust that individual with their financial assets. Even a single instance of dishonesty regarding regulatory compliance may indicate a broader disregard for the rules designed to protect customers.

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