FINRA Bars Broker Michael Raineri After Converting Customer Funds

Michael Raineri (Michael Patrick Raineri CRD# 4817558) is a former broker and investment advisor whose last employer was Securities America, Inc. (CRD# 10205) of Seattle, WA. His previous employers were KMS Financial Services, Inc. (CRD# 3866), Cetera Advisors LLC (CRD# 10299) and Pacific West Securities, Inc. (CRD# 6390), all of Seattle. He has been in the industry since 2006.

On 1/31/2023, a customer filed a dispute claiming that Raineri transferred $135,000 into his own personal account without the customer’s consent. This claim is currently listed as “pending.”

Securities America Inc. (SAI) discharged Raineri on 4/6/2023, with the reasons for termination as: “The Financial Professional failed to follow firm policies, including being named as POA for customers’ bank accounts and engaging in financial transactions with a customer for payment processing for personal services customer received from third parties without prior request or approval by the Firm.”

According to FINRA Rule 2150(a), individuals affiliated with a member organization are prohibited from making inappropriate use of a customer’s securities or funds. Additionally, FINRA Rule 2010 mandates that associated individuals maintain high standards of commercial honor and conduct business in a fair and equitable manner.

Conversion refers to the deliberate and unauthorized act of taking ownership of or exercising control over property that one does not own or have rightful possession of. If an associated person engages in the conversion of customer funds, they would be in violation of both FINRA Rule 2150(a) and Rule 2010.

SAI submitted a Form U4 Amendment on 3/20/2023, revealing that the firm had received a customer complaint accusing Raineri of unauthorized transfer of around $135,000 from the customer’s bank account to himself. Despite the complaint and bar, Raineri’s registration with FINRA through SAI is still active.

FINRA’s investigation followed the Form U4 Amendment filed by SAI. According to the Acceptance, Waiver & Consent (AWC) Letter signed by Raineri and FINRA counsel, Raineri began paying some personal expenses for a customer in August of 2018. The customer then began repaying Raineri, but far beyond the original expense payments.

Ultimately, Raineri reimbursed himself approximately $135,000 by transferring the money to his own account. This amount was more than what was paid on the customer’s behalf. As he was not entitled to the excess funds, he was found to have converted the customer’s funds by using them himself. This violated FINRA Rules 2150(a) and 2010.

By signing the AWC letter, Raineri consented to the findings and neither admitted nor denied them. He also agreed to being permanently barred from any affiliation with any FINRA member in any capacity. Raineri signed the AWC on 3/24/2023, and FINRA’s legal counsel signed it on 4/18/2023. The bar became effective immediately and is indefinite.

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