According to FINRA, Paul Xavier Nannicelli was assessed a deferred fine of $5,000 and suspended from association with any FINRA member in all capacities for eight months for circumventing his member firm's procedures regarding beneficiary designations.

The findings revealed that Nannicelli assisted a customer, to whom he was not related, with designating his immediate family members as beneficiaries on six of the customer's accounts held at the firm. The firm's procedures prohibited registered representatives or their immediate family members from being named as beneficiaries on customer accounts without the firm's approval.

Following the death of the customer's husband, the customer signed and submitted forms changing the beneficiaries on her accounts. The primary beneficiary on each account was changed to Nannicelli's wife, and the contingent beneficiaries were changed to Nannicelli's four children. Nannicelli prepared the forms, which identified each new beneficiary as a "family friend," despite the fact that his wife and children had never met the customer in person.

Nannicelli did not seek the firm's approval for the beneficiary designations and certified on firm compliance questionnaires that he was not aware of an immediate family member being a beneficiary on any client accounts.

After Nannicelli resigned from the firm, the customer complained about the beneficiary designations and closed all of her accounts. Nannicelli and his family did not benefit financially from the designations.

The suspension is in effect from July 7, 2025, through March 6, 2026. This case highlights why firms have procedures limiting representatives' ability to be named as beneficiaries on customer accounts, as such arrangements create significant potential for conflicts of interest and customer harm.