According to FINRA, Jeffrey Karakatsanis was barred from association with any FINRA member in all capacities on March 25, 2022, for engaging in conversion and improper use of funds.

Without authorization, Karakatsanis reversed fees totaling $2,663 charged to his own bank account and fees totaling $170.24 charged to his friend's bank account, both held at his member firm's bank affiliate. The bank had already deducted the fees from the accounts. Karakatsanis used another bank employee's computer to reverse the fees without that employee's knowledge or consent.

By reversing the fees, Karakatsanis caused $2,663 of the bank's funds to be transferred to his own account and $170.24 to his friend's account. Neither Karakatsanis nor his friend owned or were entitled to possess these funds, and neither returned the funds to the bank.

This conduct demonstrates multiple violations of trust and ethics. Karakatsanis not only improperly reversed legitimate fees but also used another employee's computer without permission, compounding his misconduct. The use of another employee's computer suggests an attempt to conceal his actions.

While the dollar amounts may seem modest, the conduct reveals fundamental dishonesty and willingness to steal from his employer. Such behavior is incompatible with the high ethical standards required in the financial services industry, where representatives are entrusted with customer assets and confidential information.

Conversion involves the unauthorized taking of property belonging to another. When employees manipulate systems to transfer their employer's funds to themselves, it constitutes theft regardless of the amount involved.

This case illustrates FINRA's zero-tolerance approach to dishonest conduct. Even relatively small-scale theft results in permanent bars from the industry because integrity is fundamental to investor protection. Investors need confidence that their financial professionals are honest and trustworthy.