According to FINRA, Steven Douglas Schisler was barred from association with any FINRA member in all capacities on January 31, 2022, for making unsuitable recommendations, participating in unapproved private securities transactions, willfully failing to amend his Form U4, conditioning a settlement on expungement support, lying under oath, and engaging in unethical business conduct.
Schisler recommended that two elderly, married customers invest $300,000 in a promissory note to finance a commercial property. This represented a substantial portion of their retirement savings, which they needed to pay down considerable debt. The investment was limited to accredited investors, which the customers were not. Schisler failed to perform adequate due diligence - even a basic internet search would have revealed that one partner issuing the note had been barred from the securities industry for defrauding investors.
Schisler participated in this private securities transaction without firm approval, despite repeated explicit instructions that he could not do so. He facilitated the investment by recommending it, arranging meetings in his office, and receiving a $9,500 finder's fee. When the issuer defaulted on the $300,000 note, one elderly customer died, and the surviving spouse filed civil and arbitration claims against Schisler.
Schisler willfully failed to timely amend his Form U4 to report the civil lawsuit, arbitration, their resolutions, and receipt of a Wells Notice about a FINRA investigation. He also entered a settlement requiring the elderly customer to support his expungement request - a prohibited condition. During the expungement hearing, Schisler lied under oath about his involvement, falsely claiming he did not introduce the customers to the issuer. He also lied during FINRA testimony, falsely stating his finder's fee was a personal loan.
Furthermore, Schisler engaged in unethical conduct toward another elderly, retired customer by soliciting a $50,000 loan secured by property on the verge of default. He defaulted days later, lost the property to foreclosure, failed to disclose this to the customer, and took over six years to repay the loan. Schisler also made false statements on a firm compliance questionnaire about borrowing from customers and caused his firm to fail to preserve records by using unmonitored non-firm email accounts.
This extensive pattern of misconduct demonstrates flagrant disregard for investor protection and regulatory obligations. Investors should conduct thorough due diligence on advisors and check FINRA BrokerCheck for disciplinary history before entrusting them with their financial futures.
