FINRA Broker Disciplinary Action Report: April 2020
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
James Adam Paquette (CRD #2164109, Sullivans Island, South Carolina)
The NAC dismissed Paquette’s appeal of an OHO decision. Paquette failed to provide the required information and as a result his appeal was considered abandoned, therefore he is barred from association with any FINRA member in all capacities. The sanction was based on findings that Paquette willfully failed to timely update his Form U4 to disclose a felony charge. The findings stated that Paquette’s member firm learned of the felony charge when an insurance company informed the firm that it had refused to renew Paquette’s appointment as an insurance agent because of the charge. When the firm found out about the charge, Paquette admitted to the firm that he was facing a criminal charge, but did not give further details, such as the fact that the charge was a felony. Paquette’s failure to amend his Form U4 continued for more than a year and, most likely, would have continued indefinitely if the insurance company had not informed the firm of the charge.
Jeffrey Scott Nimmow (CRD #2693601, Merrimac, Wisconsin)
Without admitting or denying the findings, Nimmow consented to the sanction and to the entry of findings that he engaged in the sale of promissory notes to investors totaling at least $3,365,000 without disclosing and receiving approval from his member firm. The findings stated that the promissory notes were for a self-advertised real-estate investment fund and were unregistered securities. The findings also stated that Nimmow was only registered to sell certain categories of securities and did not possess the proper FINRA registration to sell these promissory notes. Nimmow received approximately $177,937 in commissions for these transactions. Later, the real-estate investment fund filed a voluntary Chapter 11 bankruptcy petition. The Securities and Exchange Commission (SEC) filed a complaint with the U.S. District Court for the Southern District of Florida against the fund and its former owner, among others, claiming that they ran a Ponzi scheme. The U.S. District Court issued a final judgement, requiring the fund and its owner to, among other things, disgorge their ill-gotten gains. The order also required the owner to pay a civil penalty.
Ronald Walter Hannes (CRD #1462241, Spokane, Washington)
Without admitting or denying the findings, Hannes consented to the sanction and to the entry of findings that he refused to produce documents and information requested by FINRA during its investigation into allegations that he converted customer funds. The findings stated that Hannes’ member firm terminated his association with it and disclosed that it received notice from a client that funds were paid to Hannes for purchase of a life insurance contract that were not forwarded to the life insurance company.
Joseph Morris Thurnherr (CRD #5045624, Matawan, New Jersey)
Without admitting or denying the findings, Thurnherr consented to the sanction and to the entry of findings that he refused to provide documents and information requested by FINRA in connection with an investigation into allegations set forth in a customer-initiated arbitration against him.
For the full FINRA Disciplinary Report, please click here.
