← Broker database 2024-01-22
FINRA Bars Michael Archimede for Failing to Cooperate with Investigation
According to FINRA, Michael Archimede (CRD #5701306), based in Waukesha, Wisconsin, was barred from association with any FINRA member firm in all capacities effective January 22, 2024. The action was taken through a Letter of Acceptance, Waiver and Consent (AWC), in which Archimede, without admitting or denying the findings, consented to the bar and the entry of findings against him.
FINRA found that Archimede refused to provide information and documents and refused to appear for on-the-record testimony as requested by the regulator. FINRA had issued these requests as part of an investigation into whether Archimede had borrowed funds from customers in connection with his potential investment in an offering involving crypto assets, conducted away from his member firm.
Borrowing money from customers is a practice that is either prohibited or heavily restricted under FINRA rules. Most firms have strict policies against it, and where it is permitted, it is typically limited to specific relationships such as family members and requires prior written approval. When borrowing occurs in connection with investments conducted away from the firm, it compounds the concern because it means the firm may have had no oversight of the transaction, and the customer may have lacked the protections that come with firm-supervised activity.
The involvement of crypto assets adds another layer of concern. Crypto-related offerings have been an area of heightened regulatory scrutiny, as many such products carry significant risk and may not be registered or properly disclosed to investors. When a broker conducts such activity away from the firm, investors may have limited recourse if things go wrong.
Archimede's refusal to cooperate with the FINRA investigation triggered the bar. Under FINRA Rule 8210, all associated persons are obligated to cooperate with regulatory investigations by providing documents, information, and testimony when requested. A failure to do so is treated as a standalone violation that typically results in a permanent bar from the industry, regardless of the outcome of the underlying investigation.
Investors should be aware that if a broker asks to borrow money or proposes investments outside of the brokerage firm, these are significant warning signs. Always verify that any investment is being conducted through proper channels and check your broker's disciplinary history on FINRA BrokerCheck before entrusting them with your funds.