FINRA

New FINRA Guidelines Aim to Protect Seniors from Elder Financial Fraud

July 3, 2017 | Silver Law Group

Learn about the safeguards that can help older investors

The Financial Industry Regulatory Authority (FINRA) is a nonprofit organization overseen by the government and tasked by the securities industry to protect investors through the creation and enforcement of rules and regulations. Periodically, FINRA makes adjustments and revisions to its guidelines, and the agency recently added measures to safeguard elderly investors.

In its 17-13 regulatory notice, FINRA spells out its new principal consideration, one of which is intended to protect vulnerable customers. Focusing on the undue influence a broker could have over a customer, the regulation “reaffirms that financial exploitation of senior and other vulnerable customers should result in strong sanctions.”

FINRA Investigation Results in Career-Ending Decision for Broker Christopher Ariola

June 30, 2017 | Silver Law Group

Ariola allegedly made unsuitable recommendations in high-risk gold and energy stocks to elderly investors.

In December 2016, a disciplinary proceeding by the Financial Industry Regulatory Authority (FINRA) resulted in broker Christopher Ariola being permanently barred from the securities industry. This decision followed a FINRA investigation into Ariola’s termination from Bay Mutual due to the firm’s concerns over recommendations he made to firm customers that were not consistent with firm guidelines.

The investigation uncovered allegations of possible senior financial fraud in that he made unsuitable recommendations to four retirees with limited financial resources and who needed income from those resources. His reported recommendation that these unsophisticated investors concentrate their retirement assets in risky gold and energy stocks was inconsistent with their financial needs and objectives.

Reuters Analyzes FINRA BrokerCheck Data to Compile List of High-risk Brokerage Firms After FINRA Fails to Disclose Said Information

June 16, 2017 | Silver Law Group

A Reuters investigation team ran a story on June 12, 2017 concerning high-risk brokers and brokerage firms and compiling a list of the firms with highest percentage of brokers with BrokerCheck disclosures.

The FINRA BrokerCheck tool allows users to search specific brokerage firms and brokers to see a variety of information such as location, ownership, outside business activities and, most importantly, FINRA disclosures.

There are a total of 23 types of incidents that might give investors concern, such as regulatory sanctions, lawsuit judgments and bankruptcies. Unfortunately, the information, while very helpful, leaves out bulk information about which brokerage firms have a higher percentage of brokers reporting these incidents.

Santander Securities, LLC Broker Joan Marie Larsen Is Permanently Barred by FINRA

June 12, 2017 | Silver Law Group

Career-ending move involves reports of accepting a loan from an elderly customer

New Jersey-based broker Joan Marie Larsen’s financial industry career is over after she was reported to have accepted a loan from an elderly customer.

In this case, Larsen allegedly accepted a $50,000 interest-free personal loan from an elderly client who was not an immediate family member. An investigation by the Financial Industry Regulatory Authority (FINRA) found that “Larsen’s member firm did not have written procedures permitting such a loan.” In addition, Larsen only paid $3,000 on the loan, leaving $47,000 still due to the customer.

Edward Jones Broker Austin Wayne Morton Accused of Elder Fraud Involving 82-Year Old Client Diagnosed with Dementia

June 2, 2017 | Silver Law Group

The financial advisor’s alleged financial stress stemmed from gambling losses that exceeded his annual income.

The Financial Industry Regulatory Authority (FINRA) is currently investigating former St. Louis, MO- and Oklahoma-based broker Austin Wayne Morton after his dismissal from his member firm, Edward Jones, under suspicion of elder fraud.

According to FINRA, in September 2016, Morton allegedly accompanied his 82-year-old former client diagnosed with dementia to the bank to assist him in withdrawing over $20,000 in cash. Morton then allegedly left with $20,000 of the client’s money. The following month, the elderly client reportedly agreed to provide Morton with a loan for $6,000 to pay for medical expenses. The medical expenses, however, were never actually incurred.

Barry Franklin Connell Has Been Barred by FINRA and Charged by the SEC for Allegedly Stealing $5M from Elderly Clients

June 2, 2017 | Silver Law Group

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Connell is reported to have stolen $5 million from his elderly clients

In January, the Financial Industry Regulatory Authority (FINRA) permanently barred Barry Franklin Connell from working as a broker. The decision came after an investigation reported that he made numerous transfers from client accounts without authorization. FINRA first suspended Connell but had no choice but to ban him after he declined to offer the agency information it requested.

Within weeks of FINRA’s ruling, Connell was charged by the Securities and Exchange Commission (SEC) with stealing money from clients. Allegedly, the funds he was transferring were being used to settle a private lawsuit. The SEC alleges that for about a year, Connell moved money between accounts – many of which belonged to elderly clients – and also issued wire transfers and checks from those accounts to third parties.

FINRA plays an important role in our financial system. Learn how.

May 22, 2017 | Silver Law Group

Learn how the organization protects you as an investor

If you have been investing for a while or you follow news about the securities industry, you have probably heard about the Financial Industry Regulatory Authority, also known as FINRA. Though not a part of the government, FINRA is given authority by Congress to ensure the “broker-dealer industry operates fairly and honestly.” FINRA employs more than 3,500 people, but because it is a nonprofit, no taxpayer money is used to keep the organization running.

What does FINRA do?

Texas-based Broker Patrick Perales Permanently Barred by FINRA

May 1, 2017 | Silver Law Group

Broker failed to respond to agency following discharge from Wells Fargo Advisors, LLC after allegations related to his status as Power of Attorney for a client

In August 2016, the Financial Regulatory Authority (FINRA) permanently barred former Wells Fargo Advisors, LLC broker Patrick Perales from participating as a broker or otherwise associating with firms that sell securities to the public. The regulatory action is a result of Perales’ failure to respond to FINRA’s requests for documents and information related to an investigation surrounding why his then employer, Wells Fargo Advisors, LLC discharged him earlier in 2016.

According to his FINRA BrokerCheck report, Wells Fargo Advisors terminated Perales’ employment in January 2016 “for reasons unrelated to the business of Wells Fargo Advisors, LLC. Banker acted as a paid POA (Power of Attorney) for a bank client without disclosing and obtaining approval to serve as POA for a client.” While the bank client admitted giving Perales Power of Attorney over his account and paying Perales to assist him with his business needs, the client also alleged that money was missing from his account. A violation of this trust could represent Power of Attorney fraud.

Are Brokers Allowed to Borrow from Customers?

April 30, 2017 | Silver Law Group

The answer, in most all cases, is “no”

In order to become licensed, one of the things a broker has to do is agree to adhere to the rules and regulations established by the Financial Industry Regulatory Authority (FINRA). One of these rules involves the borrowing of money from clients, and on this matter FINRA is very clear.

Among other stipulations, FINRA Rule 3240 says that unless the person is an immediate family member or a firm has specific written procedures about borrowing and lending, then it constitutes a violation.

California Broker Kelly Althar Receives Permanent Ban from FINRA after Elder Fraud Case

April 20, 2017 | Silver Law Group

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The broker is reported to have made risky investments that lost a client most of her retirement savings

Early in 2017, the Financial Industry Regulatory Authority (FINRA) permanently banned Kelly Althar from acting as a broker. This action was the result of several allegations, including excessive trading, unsuitable recommendations, and possible elder financial fraud.

A 10-year veteran of the securities industry, Althar worked for these six firms, starting in 1995: