According to FINRA, Michael Timothy Shoniker was assessed a deferred fine of $7,500 and suspended from association with any FINRA member firm in all capacities for six months for failing to timely and fully disclose his outside business activities (OBAs) to his member firm.

Shoniker formed a company to invest in real estate but did not disclose it to his firm for four months. Shortly after disclosing the real estate business, Shoniker began using the company to provide consulting and marketing services to a third-party investment advisor. He also began referring customers of his firm to the advisor for compensation.

In exchange for Shoniker's referrals and consulting and marketing services, the advisor paid Shoniker approximately $740,000 through his company. This compensation represented half of the investment advisory fees, less expenses, that the advisor received from over 96 customers of Shoniker's firm.

Although Shoniker submitted OBA forms to his firm, he described his company only as a real estate business without disclosing the referral, consulting, or marketing services he provided. Shoniker also submitted annual compliance questionnaires falsely stating that he provided no financial consulting services to third parties and had completely disclosed his OBAs.

FINRA rules require registered representatives to disclose outside business activities so firms can evaluate potential conflicts of interest and ensure customers are protected. When representatives receive undisclosed compensation for referring customers to outside advisors, it creates conflicts that may not be in customers' best interests.

The suspension is in effect from December 2, 2024, through June 1, 2025.