South Florida Financial Advisor Fined $10,000 and Suspended for 16 Months for Taking Improper Loans from Customers
Michael Kris Pina (CRD #5922058) was registered as a securities broker from September of 2013 to March of 2019. During that time, he worked at PFS Investments Inc. in Fort Lauderdale, Florida. In 2019, Mr. Pina was permitted to resign from the brokerage firm after allegedly taking improper loans from at least four different customers. Soon after, the Financial Industry Regulatory Authority (FINRA) launched its own investigation into this broker’s conduct. Here, our Miami investment fraud lawyers provide an overview of FINRA’s findings.
Broker Sanctions: Michael Kris Pina Formerly of PFS Investments Inc.
Based on its investigation, FINRA believes that broker Michael Kris Pina improperly borrowed approximately $72,000 from four customers of PFS Investments Inc. Notably, his brokerage firm had written procedures in place expressly prohibiting broker-customer borrowing and lending arrangements. FINRA notes that this broker failed to disclose the loans on mandatory compliance forms. Quite the contrary, he indicated that he did not borrow any money from firm customers.
Mr. Pina was terminated after his member firm learned of the loan when one of the customers complained. According to FINRA, she told PFS Investments Inc. that she believed she was providing Mr. Pina the funds for an investment. It was not clear that she recognized that she was providing that money to this broker as a loan. Eventually, her complaint was settled for $20,000 in financial compensation.
Without admitting or denying any of the allegations raised against him, former PFS Investments Inc. broker Michael Kris Pina consented to FINRA’s penalties, including a $10,000 fine, payment of $19,800 in restitution to investors, and a sixteen-month suspension from the securities industry. His suspension is set to run until February of 2022.
Understanding FINRA Rule 3240
FINRA Rule 3240 regulates borrowing and lending arrangements between registered representatives and customers of their member firm. Loans are only allowed in limited circumstances. Under the rule, brokers are prohibited from borrowing from their customers unless the following two conditions are met:
- The financial advisor’s member firm has written policies in place allowing borrowing; and
- There is a qualifying familial, personal, or business relationship between the financial advisor and the customer.
In addition to satisfying these requirements, registered representatives must disclose and seek approval for any proposed lending arrangements. Failure to do so is a violation of securities industry rules, even if the loan otherwise meets standards. These rules are designed to protect investors.
Call Our Miami FINRA Arbitration Attorneys for Immediate Help With Your Case
At Carlson & Associates, P.A., our Florida securities arbitration lawyers provide reliable, results-focused legal services to investors and their families. We have the experience you can rely on to hold negligent financial advisors and negligent brokerage firms accountable. If you suffered losses because your broker violated securities industry rules, we are available to help. Call us now for a confidential consultation. We handle FINRA arbitration cases throughout South Florida.
Resource:
brokercheck.finra.org/individual/summary/5922058