According to FINRA, John Timothy Rice Sr. was assessed a deferred fine of $10,000, suspended from association with any FINRA member in all capacities for 18 months, and ordered to pay deferred disgorgement of $127,549 plus interest.

The findings revealed that Rice shared material nonpublic information about imminent block order transactions with two institutional customers. After receiving this information from Rice, the customers submitted orders to the firm for execution in the same security prior to the completion of the block order. Rice received $127,549 in commissions for these transactions.

In 35 of the 111 transactions, the trades by the customers with whom Rice shared the block trade information resulted in unfavorable prices to the institutional customers who placed the block orders. These affected customers were harmed in the amount of approximately $71,000. The firm voluntarily reimbursed all affected customers during FINRA's investigation.

Block trades are large orders, typically from institutional investors, that can move market prices if not handled carefully. When information about pending block orders is leaked to others, those individuals can trade ahead of the block order and profit from the anticipated price movement. This practice, known as front-running, harms the customers placing the block orders because they receive worse execution prices.

Rice's conduct represents a serious breach of the duty owed to customers. By sharing confidential information about pending orders, he enabled others to trade at the expense of his firm's customers. The $127,549 in commissions he received came directly at the cost of customer harm.

The suspension is in effect from July 21, 2025, through January 20, 2027. The disgorgement order requires Rice to return the commissions he improperly earned. This case demonstrates that FINRA takes seriously the misuse of confidential customer information.