According to FINRA, Brandon V. Spano was assessed a deferred fine of $5,000 and suspended from association with any FINRA member in all capacities for three months for engaging in an outside business activity without providing written notice to his member firm.

Spano entered into an agreement with a firm customer to invest in real estate. The customer provided $110,000 and Spano provided $340,000 to purchase real property with the intention of renovating and reselling it. Spano coordinated renovations using both his own labor and third-party contractors, expecting to receive a share of any resale profits.

This real estate business was outside the scope of Spano's employment with his firm, yet he failed to provide written notice of the activity as required by FINRA Rule 3270.

Compounding the violation, Spano falsely attested to the firm in annual compliance questionnaires that he had disclosed all outside business activities.

The requirement to disclose outside business activities exists for important reasons. Firms need to evaluate potential conflicts of interest, particularly when activities involve customers. The customer relationship creates dynamics that may not exist in purely arm's-length business transactions.

When a broker engages in business activities with customers outside the firm relationship, customers may not have the same protections they would have for activities conducted through the firm.

The suspension is in effect from November 3, 2025, through February 2, 2026.

For investors, be cautious about entering into business relationships with your broker outside of your brokerage account relationship. Such arrangements may not be supervised by the firm and may not be covered by investor protection mechanisms like FINRA arbitration.