According to FINRA, Kristopher Charles Kessler was fined $5,000 and suspended from association with any FINRA member in all capacities for one month on July 31, 2024, for engaging in an outside business activity without providing prior written notice to his member firm.

Kessler helped to create and operate a financial technology company with another firm representative. Kessler served as the company's Chief Marketing Officer and was identified as a member on its operating agreement. For his role, Kessler received a five percent interest in the company. In addition, Kessler completed annual compliance questionnaires in which he falsely denied engaging in any business activities outside of the firm.

FINRA Rule 3270 requires registered representatives to provide prior written notice to their member firm before engaging in any outside business activity. This requirement exists to allow firms to evaluate potential conflicts of interest, ensure proper supervision, and assess whether the outside activity is consistent with the representative's obligations to the firm and its customers. Outside business activities can create conflicts of interest, particularly when they involve financial services or technology that may compete with or affect the firm's business.

By serving as Chief Marketing Officer and holding a five percent ownership interest in the financial technology company without disclosing this to his firm, Kessler prevented the firm from evaluating whether this activity created any conflicts of interest or required any additional supervision. The false denials on annual compliance questionnaires compound the violation by demonstrating dishonesty and a deliberate attempt to conceal the outside business activity.

The one-month suspension, in effect from August 19, 2024, through September 18, 2024, demonstrates that failing to disclose outside business activities and making false statements on compliance questionnaires are serious violations that warrant disciplinary action.