According to FINRA, Eric Brian Kleiner was barred from association with any FINRA member in all capacities for refusing to provide documents and information requested during a FINRA investigation.
FINRA's investigation originated from its review of the Form U5 filed by Kleiner's member firm. The Form U5 disclosed that the firm had discharged Kleiner for multiple serious concerns.
According to the termination disclosure, Kleiner was discharged due to concerns related to recommending non-firm approved and firm restricted investments to customers, including investments in which he was also personally invested. The disclosure also noted Kleiner's failure to fully disclose outside investments and his use of a personal device to engage in unauthorized disclosure of confidential, internal-use-only firm information.
These allegations paint a troubling picture. Recommending investments that a firm has not approved or has specifically restricted suggests the broker may have been placing personal interests above customer protection. When a broker is personally invested in what they recommend to customers, significant conflicts of interest arise.
The use of personal devices to share confidential firm information raises additional concerns about judgment and trustworthiness.
Kleiner's refusal to cooperate with FINRA's investigation resulted in his permanent bar from the industry. This sanction protects investors by ensuring that individuals who refuse to account for potential misconduct cannot continue working in the securities industry.
For investors, this case underscores the importance of asking questions about any investment recommendation. Is this investment approved by your broker's firm? Does your broker have any personal financial interest in the investment? These questions can help identify potential conflicts of interest.
Always verify investment recommendations independently and check your broker's background through FINRA's BrokerCheck system.