According to FINRA, Charles Joseph Riccomini (CRD #7427048), a registered representative based in Saint Marys, Kansas, was assessed a deferred fine of $5,000 and suspended from association with any FINRA member in all capacities for three months after it was found that he engaged in an outside business activity (OBA) without providing the required prior written notice to his member firm.

FINRA rules require that registered representatives notify their member firms in writing before engaging in any outside business activity. This requirement exists so that firms can evaluate whether the activity presents potential conflicts of interest, involves compensation from third parties that could influence the representative's conduct, or otherwise poses risks to the firm's customers. Failure to provide this notice deprives the firm of its ability to supervise the representative's activities and protect investors from potential harm.

FINRA's findings revealed that Riccomini worked as a marketing affiliate for a company owned and operated by three other registered representatives of the same firm. In this role, Riccomini referred potential customers to the company, which sold e-commerce storefront services and digital real estate. When referred customers purchased these services, Riccomini received a commission. Over the course of his involvement, Riccomini earned $45,040 in commissions for successfully referring multiple customers, including at least one customer of his member firm. Despite the substantial income and the obvious connection to other firm representatives, Riccomini failed to provide prior written notice of this activity to his firm.

The involvement of a firm customer in these referrals is particularly concerning because it creates a situation where a registered representative may be motivated by outside compensation rather than the customer's best interests. When a broker has undisclosed financial incentives, investors cannot accurately assess whether the advice they receive is truly in their best interest.

Without admitting or denying the findings, Riccomini consented to the sanctions through an AWC agreement issued on August 6, 2024. The three-month suspension was in effect from August 19, 2024, through November 18, 2024. This matter is documented under FINRA Case #2024081647102.

Investors should be aware that their brokers are required to disclose outside business activities to their firms. If an investor discovers that their broker is involved in undisclosed business activities, it may be a sign that the broker is not being fully transparent about potential conflicts of interest. Checking a broker's record on FINRA BrokerCheck can reveal disciplinary actions and help investors make more informed decisions about who they trust with their financial affairs.