FINRA Accuses Synapse Brokerage Executives of Failures Tied to $2 Billion Fintech Platform

Two former Synapse Brokerage executives are facing a Financial Industry Regulatory Authority (FINRA) complaint over their roles in the collapse of a high-profile “banking-as-a-service” platform. FINRA alleges Jeffrey Alan Stanley (CRD #4645288) and Mark Elliot Paverman (CRD #1046105) failed in their supervisory and compliance responsibilities, leaving millions of customer accounts at risk (Case #2023080111701).

Allegations Surrounding Synapse’s Banking-as-a-Service Model

According to the complaint, Synapse Financial Technologies (“Synapse Fi”) ran a technology platform connecting fintech companies with banks to provide end users with online banking services. By late 2023, millions of customers and over $2 billion in deposits were tied to this model.

When reconciliation disputes arose with partner banks over tens of millions of dollars in customer funds, Synapse Fi moved accounts to its affiliate, Synapse Brokerage. FINRA alleges Stanley, who became CEO of Synapse Brokerage in December 2023, approved the launch of cash management accounts without obtaining adequate customer authorization, allowed non-FINRA personnel at Synapse Fi to perform brokerage functions, and ignored red flags of significant ledger discrepancies.

Separately, Paverman, Synapse Brokerage’s Chief Compliance Officer, is accused of causing the firm to violate recordkeeping rules by failing to preserve required emails and instant messages. FINRA also alleges he falsely represented that the firm had independent access to its records, when in reality it relied on its parent company, Synapse Fi.

Based on these allegations, Stanley is charged with failing to supervise in violation of FINRA Rules 3110 and 2010. Paverman faces charges for recordkeeping failures under FINRA Rule 4511 and for making misrepresentations to FINRA, both of which violated Rule 2010. The complaint further states that these actions left customers unable to access millions of dollars in deposits during Synapse Fi’s 2024 bankruptcy.

At this stage, the claims are allegations only. No findings of fact or disciplinary sanctions have been issued. If the respondents do not answer the complaint, FINRA may pursue penalties including fines, suspensions or permanent bars from the securities industry.

Understand Your Recovery Options Before It’s Too Late

Complaints like this show how failures in oversight can ripple out to harm investors. While FINRA has not yet issued findings, customers who relied on Synapse Brokerage or fintechs tied to Synapse Fi may face questions about their account balances or fund access.

If you’re concerned about frozen funds, private placements or fintech-linked brokerage accounts, now is the time to evaluate your options.

Sonn Law Group represents investors nationwide in cases involving broker misconduct, regulatory failures and private placement losses. We work on a contingency fee basis, so you don’t pay unless we recover compensation for you.

For a free, confidential consultation, call 833-912-3000 or complete our online form.