According to FINRA, Michael Lancaster was barred from association with any FINRA member in all capacities on October 9, 2024, after refusing to produce written information and documents requested by FINRA in connection with its investigation surrounding his termination from his member firm.
The investigation originated from FINRA's review of a Form U5 filed by Lancaster's firm stating that he was discharged due to concerns he did not adhere to the firm's complaints policy. Firms have policies requiring representatives to promptly report customer complaints and cooperate with the firm's investigation of complaints. These policies are essential to ensure that customer concerns are addressed and that patterns of problematic behavior are identified and corrected.
Failure to adhere to a firm's complaints policy can take many forms, including failing to report customer complaints to the firm, attempting to resolve complaints directly with customers without firm involvement, or failing to cooperate with the firm's investigation of complaints. Each of these scenarios is problematic because it prevents the firm from properly supervising the representative and addressing customer concerns through appropriate channels.
By refusing to provide information to FINRA, Lancaster prevented FINRA from investigating the specific nature of his failure to adhere to the complaints policy, whether any customers were harmed, and whether there were broader compliance issues. This obstruction resulted in a permanent bar from the securities industry.
Investors should understand the importance of following proper procedures when making complaints about their broker. Complaints should be submitted to the firm in writing, and investors should keep records of all communications. If a broker attempts to handle a complaint informally or discourages an investor from contacting the firm's compliance department, that is a red flag. Firms need to know about customer complaints to properly supervise their representatives and identify problematic patterns.
The requirement that brokers adhere to complaint policies exists to protect investors and ensure that complaints are properly investigated and resolved. When brokers circumvent these policies, it suggests they are trying to hide their misconduct from firm supervision.
Lancaster's refusal to cooperate with FINRA's investigation suggests he had no good explanation for his failure to adhere to the complaints policy and chose to accept a permanent bar rather than provide information about his conduct. This bar protects investors by ensuring Lancaster cannot continue working in the securities industry. Investors can check broker backgrounds, including any bars, through FINRA's BrokerCheck system.
