October 2025 FINRA Real-World Discipline Examples
If you ever wonder whether all the rules and policies really matter, they DO! Let's look at some recent FINRA enforcement cases.:
- Use of Discretion and Texting from personal cell phone: An individual was fined $10,000 and suspended for 45 days for placing over 250 discretionary trades in the brokerage accounts of two customers without written authorization. The advisor had discussed his trading strategy with the customers generally, but he did not speak with the customers about the specific trades on the dates of the transactions, and the accounts were not approved for discretion. In addition, the advisor was sending business-related messages to customers using his personal cell phone. He did not provide the text messages to the firm for review or retention with caused his firm to maintain incomplete books and records.
- Sharing Commissions: An individual was fined $5,000 and suspended for two months for sharing approximately $14,000 in commissions generated from securities transactions with an unregistered entity.
- Failing to report identity theft and internet scams: Bancorp Investments was censured and fined $500,000 for failing to file 42 Suspicious Activity Reports (SARs). The firm incorrectly used a $25,000 monetary threshold applicable to banks instead of the $5,000 threshold applicable to broker dealers. The suspicious activity that went unreported included account intrusions, identity theft, and internet scams.
Please contact the Prosperity Network Compliance Team with any questions: compliance@prosperityadvisors.com or 913-529-5500 Option 2.
Internal Use Only
Attachment: FINRA Monthly Disciplinary Actions October 2025