FINRA Broker Disciplinary Action Report: December 2019
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, and/or Fined by FINRA
RBC Capital Markets, LLC (CRD #31194, New York, New York)
Without admitting or denying the findings, the firm consented to the sanctions and to the entry of findings that it failed to establish and maintain a reasonable supervisory system governing the delivery of prospectuses for exchange-traded funds (ETFs), exchangetraded notes (ETNs) and mutual funds and failed to enforce its WSPs.
Cristina Sabengsy (CRD #6304970, Gilberts, Illinois)
Without admitting or denying the findings, Sabengsy consented to the sanction and to the entry of findings that she forged the signatures of her customers in order to facilitate unauthorized insurance transactions and obtain commissions on those transactions.
Bradley Carl Reifler (CRD #1589414, Millbrook, New York)
The NAC barred Reifler from associating with any FINRA member in any capacity because he refused to answer FINRA’s questions during on-the-record testimony concerning his involvement in a fraudulent misappropriation scheme.
Louis Mark Miller (CRD #3054955, Syosset, New York)
Without admitting or denying the allegations, Miller consented to the sanction and to the entry of findings that he failed to provide documents and information and appear for on-the-record testimony requested by FINRA in connection with its investigation into allegations that he improperly exercised discretion in customer accounts without prior written authorization.
Daniel Gordon Maughan (CRD #2561363, Los Angeles, California)
Without admitting or denying the allegations, Maughan consented to the sanction and to the entry of findings that he willfully violated Section 10(b) of the Exchange Act of 1934, and Rule 10b-5 thereunder, and also violated FINRA Rules 2020 and 2010 by churning and excessively trading the trust account of two customers, a married couple. Maughan exercised de facto control over the trust account and made all investment decisions in it, including what securities to buy and sell, the quantities of the securities to buy and sell and when each transaction would occur. The level of activity in the trust account was inconsistent with the customers’ objectives and financial situation. Through Maughan’s churning of the trust account and by seeking to maximize his own financial benefit at the expense of his customers, he acted either with the intent to defraud (scienter) or with reckless disregard for the customers’ interests. The findings stated that Maughan executed trades in the trust account with a principal value of all purchases and sales in excess of $70 million. Maughan’s churning and excessive trading generated commissions and costs totaling approximately $841,000 while causing the account to incur realized and unrealized losses of approximately $812,000.
For the full FINRA Disciplinary Report, please click here.
