FINRA Broker Disciplinary Action Report September 2018
Each month, the agency that regulates the financial industry, FINRA (Financial Industry Regulatory Authority), produces a detailed report that runs down all disciplinary actions recently taken against brokerage firms and brokers. We strongly encourage any investor who suspects their broker and/or broker-dealer of having lost them money on dubious terms to at least skim this report to see if you recognize any names, schemes, products, or securities.
For our part, we like to pick out some of the highlights from each report. Specifically, we’re looking for schemes or abuses that might be more far-reaching than the individual cases brought through the FINRA arbitration process.
Brokers & Brokerages Barred, Suspended, or Fined by FINRA
Cetera Financial Specialist LLC (CRD #10358, Schaumburg, Illinois)
Without admitting or denying the findings, the firm consented to the sanctions and to the entry of findings that it failed to establish, maintain and enforce a supervisory system, including WSPs, reasonably designed to consider whether its registered representatives’ outside business activities would interfere with or compromise their responsibilities to the firm or customers and evaluate the advisability of imposing specific conditions or limitations on their outside business activities.
Abraham Biderman (CRD #2032813, Brooklyn, New York)
Without admitting or denying the findings, Biderman consented to the sanction and to the entry of findings that he refused to produce information requested by FINRA in connection with its investigation into his potential participation in a private securities transaction.
Robert Joseph Flanagan (CRD #5755699, Holland, Pennsylvania)
The sanction was based on findings that he failed to both timely and completely comply with FINRA’s requests for information and documents, and subsequently failed to appear for FINRA on-the-record testimony, in connection with FINRA’s investigation into his potential failure to report a civil judgment on his Form U4 and potential sales practice violations. The findings stated that Flanagan willfully failed to disclose the civil judgment on his Form U4.
Mitchell Toby Yanow (CRD #2148171, Boynton Beach, Florida)
Without admitting or denying the findings, Yanow consented to the sanction and to the entry of findings that he converted at least $205,586 of an 87-year-old customer’s funds by writing checks drawn on the customer’s brokerage account at Yanow’s member firm without the customer’s knowledge or authorization. The findings stated that the customer gave Yanow blank checks drawn on the customer’s account so that Yanow could pay the customer’s caregivers in the event the customer was unable to do so. However, Yanow used the customer’s blank checks to convert at least $205,586 of the customer’s funds, which he used to pay for his own personal expenses, including his overdue homeowner’s association fees, his children’s summer camp fees and the purchase of a 1976 Chevrolet Corvette.
Daniel B. Irving (CRD #4773478, Erie, Pennsylvania)
Without admitting or denying the findings, Irving consented to the sanctions and to the entry of findings that he mismarked 105 trades in five customer accounts as unsolicited when, in fact, the trades were solicited. The findings stated that the trades included customer purchases of various mutual funds and exchange traded funds that were unknown to the customers prior to Irving recommending the securities. The findings also stated that by mismarking the trades, Irving caused his member firm to keep inaccurate books and records.
Eric Steven Korhut (CRD #3199787, Johnstown, Pennsylvania)
Without admitting or denying the findings, Korhut consented to the sanctions and to the entry of findings that he executed 10 unauthorized trades totaling $40,004 in the accounts of customers at his member firm. The findings stated that Korhut effected a $22,000 trade in Class C mutual fund shares in the account of a customer without obtaining the customer’s prior authorization. When the customer learned of the trade, he accepted $11,000 worth of the shares, but directed Korhut to sell the remaining shares ($11,000 worth) and invest the proceeds in a different security. Korhut also sold nine securities, two stocks and shares in seven mutual funds, for a total of $27,004, in the account of customers without obtaining their prior authorization.
Steven F. Coffey (CRD #4462225, Rochester, New York)
Without admitting or denying the findings, Coffey consented to the sanction and to the entry of findings that he failed to respond to FINRA’s request for documents and information in connection with its investigation of promissory notes he sold to customers.
Michael Quiles III (CRD #4351166, Commack, New York)
An Offer of Settlement was issued in which Quiles was barred from association with any FINRA member in all capacities. Without admitting or denying the allegations, Quiles consented to the sanction and to the entry of findings that he failed to fully respond to FINRA’s requests for certain documents and information during the course of an investigation into his potential misconduct regarding a purported loan he received from a customer of a non FINRA-regulated bank partnered with his member firm and his failure to disclose, or timely disclose, certain civil judgments and a tax lien.
Steven Alan Horwitz (CRD #710899, Waltham, Massachusetts)
Without admitting or denying the allegations, Horwitz consented to the sanction and to the entry of findings that he willfully failed to amend his Form U4 to disclose an indictment, and subsequent conviction, on three felony charges. The findings stated that Horwitz remained associated with a member firm after his conviction, and while subject to statutory disqualification.
For the full Disciplinary Action Report from FINRA, visit their website by clicking here.