Miami Beach Broker Fined And Suspended By FINRA
Scott Richard Reynolds (CRD #2705340) is a previously registered FINRA broker. From February of 2005 to March of 2019, Mr. Reynolds was a representative for Spartan Securities Group LTD. in Miami Beach. Subsequent to his time there, he also worked at Avatar Securities, LLC in New York.
On March 27th, 2019, Spartan Securities discharged broker Scott Richard Reynolds after allegations of misconduct. The broker-dealer states that he allegedly traded in the proprietary account of the firm beyond the dollar/size limits for which he had authority.
Earlier this year, FINRA completed its investigation into the matter—announcing a $60,000 fine and 18 month suspension for the broker. Here, our Miami investment fraud attorneys highlight the key things to know about the allegations against South Florida financial advisor Scott Richard Reynolds.
FINRA Sanctions: Former Spartan Securities Group Broker Scott Richard Reynolds
The alleged misconduct in this case occurred over a two-year period between early 2017 and early 2019. During that time, Spartan Securities Group broker Scott Richard Reynolds allegedly completed more than 575 “non-bona fide” trades that were matched with the firm’s proprietary account and outside investment accounts that he controlled. The way the trades were structured made it appear as though Spartan Securities was a “net purchaser”—meaning the clearing firm did not execute a ‘buy-in’ and purchase securities on the firm’s behalf.
Alleged Rules Violation
Under FINRA Rule 3210, registered representatives have a professional responsibility to disclose their trading accounts at other brokerage firms. In this case, Mr. Reynolds allegedly had access to at least six undisclosed outside accounts. Spartan Securities contends that he was using those accounts to make certain unapproved transactions.
Notably, regulators also allege that former Spartan Securities Group broker Scott Richard Reynolds violated FINRA Rule 2010. Somewhat of a ‘catch-all’ rule, FINRA 2010 requires brokers to uphold high standards of commercial integrity. The self-regulatory agency alleges that Mr. Reynolds breached this rule by impersonating his relative in a telephone conversation with investigators. The “relative” responded to FINRA via phone call after receiving an email requesting information.
Fine and Suspension
Former Spartan Securities Group broker Scott Richard Reynolds declined to admit or deny any wrongdoing in this case. However, he has consented to FINRA’s findings and the agency’s proposed penalties. Specifically, FINRA has ordered:
- Payment of $60,000 in civil financial penalties; and
- An 18 month suspension from associated with securities firms in any capacity.
The suspension began in April of 2021 and it runs until October 18th, 2022.
Set Up a Confidential Consultation With an Attorney in Miami-Dade County
At Carlson & Associates, P.A., our South Florida financial advisor misconduct lawyers are strong and focused advocates for investor rights. If you suffered losses because of wrongdoing on the part of your broker, we are ready to help you get justice. Call us today to set up a confidential evaluation of your case. We represent investors throughout Southeast Florida, including in Miami, Miami Beach, Boca Raton, Fort Lauderdale, West Palm Beach, and Jupiter.