According to FINRA, Andrew M. Komarow was barred from association with any FINRA member in all capacities for refusing to provide on-the-record testimony and documents requested during a regulatory investigation.
The investigation concerned a Form U5 filed by Komarow's member firm disclosing that he was terminated for processing Automated Clearing House (ACH) instructions for his own account knowing there were insufficient funds, then improperly using credit to place trades, resulting in a negative balance. An amended Form U5 provided additional details: the firm's internal review concluded that Komarow had caused a personal account to be opened and ACH instructions to be processed, knowing accounts had insufficient funds, and used credited funds to engage in trading that generated losses before the firm received ACH rejection due to insufficient funds.
This conduct describes a scheme to improperly obtain trading capital by exploiting the timing lag in ACH processing. Essentially, Komarow allegedly initiated transfers he knew would fail, used the temporarily credited funds to trade, and left the firm holding losses when the ACH transfers were rejected for insufficient funds. This type of conduct represents fraud against the firm and manipulation of account funding processes.
While Komarow initially produced some documents to FINRA, he failed to respond fully to document requests and ultimately refused to produce additional requested materials or appear to provide on-the-record testimony. This refusal prevented regulators from fully investigating the alleged scheme and determining its full scope and impact.
The permanent bar reflects the seriousness of both the underlying allegations and Komarow's refusal to cooperate. The alleged conduct demonstrates a calculated scheme to defraud his employer, and his refusal to participate in the investigation prevented accountability. For investors, this case illustrates that firms must be vigilant about account opening procedures and fund transfer verification. The case also demonstrates that regulatory investigations continue even after employment termination, and refusal to cooperate results in the most severe sanctions. FINRA's BrokerCheck provides public access to information about such disciplinary actions.
