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September 2025 FINRA Discipline Real-World Examples

September 25, 2025

September 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.:

    • Trades after death: An individual was fined $10,000 and suspended for six months for executing unauthorized trades in, and facilitated unauthorized withdrawals from, his deceased customer’s account. The registered rep did not submit the customer’s death certificate to his member firm until over 14 months after his death. Further, he executed the trades and facilitated the withdrawals in the deceased’s account on instructions from the customer’s widow. After learning that the customer’s daughter planned to contest the customer’s will, the registered rep then asked the firm to freeze the customer’s account. The rep had already executed transactions totaling nearly $130,000 and facilitated eight withdrawals totaling nearly $85,000. The rep’s firm may be liable for the distributions from the customer’s account.
    • Impersonating a client by phone: An individual was fined $5,000 and suspended for 45 days for impersonating customers during phone calls to his prior member firm. The registered rep impersonated the customers to facilitate the transfer of their accounts to his employing member firm, or, in some instances, to transfer funds to the customer’s bank accounts. The customers had consented to the transfers, but none gave permission to impersonate them during these calls.
    • Signature issues: An individual was fined $5,000 and suspended for three months for causing a third party to sign non-securities customers’ signatures, including senior customers, on insurance-related documents without the customers’ permission. The findings stated this was done to expedite the insurance application process and not in furtherance of other misconduct. The transactions were authorized and none of the customers complained.
    • Borrowing from customers: An individual was barred for borrowing at least $2.2 million in a series of loans from two customers without providing prior notice to, or obtaining written approval from, his member firm. Some of the loans were repaid, but most were not.
    • Instant Messaging: A firm was fined $100,000 for failing to reasonably supervise the use of an approved electronic instant messaging platform provided by a vendor and failed to preserve and review certain business-related communications sent and received through the platform. The firm did not take reasonable steps to verify that the users of the vendor platform were properly connected to, and remained connected to, the archiving service.