Integrity in personal financial dealings is a core requirement for licensed financial professionals. Broker Andrew Stephen Mogol of Baltimore, Maryland, learned this the hard way when FINRA suspended him for six months and fined him $5,000 for exploiting banking transfer rules.

www.finra.org/rules-guidance/oversight-enforcement/disciplinary-actions

The Allegations According to a Letter of Acceptance, Waiver, and Consent (AWC), Mogol initiated electronic transfers totaling approximately $85,000 from his personal bank account into his firm brokerage account. The critical issue? Mogol allegedly knew his personal bank account lacked sufficient funds to cover the transfers.

Before the transfers could bounce and be reversed for insufficient funds, Mogol allegedly utilized the temporarily credited funds in his brokerage account. Although he eventually deposited sufficient funds to cover the reversed transactions so that neither the bank nor his firm suffered a permanent financial loss, FINRA determined this conduct was a severe violation of high standards of commercial honor.

What This Means for Investors While this specific case involved the broker’s personal accounts rather than client funds, it serves as an important reminder: FINRA meticulously monitors the financial integrity of its registered representatives. A broker who engages in “free-riding” or manipulates banking float times is demonstrating a lack of ethical judgment.

Investors should expect their financial advisors to act with the utmost fiduciary integrity. If you suspect your broker is engaging in unethical behavior, unauthorized trading, or questionable financial maneuvers within your own accounts, it is vital to have your portfolio independently reviewed by a qualified securities arbitration attorney.