← Broker database 2025-06-16
John Stephen Pronovost Fined $7,500 and Suspended Two Months for Undisclosed Outside Business Activity
According to FINRA, John Stephen Pronovost was fined $7,500 and suspended from association with any FINRA member in all capacities for two months for engaging in an undisclosed outside business activity.
The findings revealed that Pronovost acted as a trustee to the estate of a deceased customer of his former member firm without providing prior written notice to that firm or his current member firm. In January 2020, while associated with his former firm, Pronovost became the trustee to the deceased customer's estate and remained in that role until September 2022.
In April 2022, while associated with his current firm, Pronovost was paid $20,000 for his work as a trustee. Additionally, Pronovost completed compliance questionnaires for both firms in which he attested that he had disclosed all of his outside business activities when, in fact, he had not disclosed his role as a trustee.
FINRA rules require registered representatives to provide prior written notice to their firms before engaging in outside business activities. This requirement allows firms to evaluate potential conflicts of interest and determine whether the activity is appropriate. When a representative becomes a trustee or executor for a customer's estate, this can create conflicts, particularly if estate assets include securities held at the firm.
The failure to disclose this activity prevented both firms from exercising their supervisory responsibilities and evaluating any potential conflicts. Pronovost's false attestations on compliance questionnaires compounded the violation by actively concealing the activity.
The suspension is in effect from July 21, 2025, through September 20, 2025. For investors, this case illustrates the importance of disclosure requirements in maintaining appropriate professional boundaries. If a broker offers to serve in a fiduciary capacity for estate matters, investors should understand this arrangement should be disclosed to the broker's firm.