There isn’t much awareness regarding financial advisors. People don’t really understand what they do, how they operate, and this veil of mystery allows them to get away with a lot of wrongdoing. I’m sharing a case here to help you comprehend why it’s important to exercise caution when hiring a financial advisor. The person in question is Mark Seruya.
Who Is Mark Frederic Seruya?
- A former broker and financial advisor who worked at Morgan Stanley and Bear Stearns, holding CRD #1108375 and registered as an investment adviser representative.
- In 2024–25, recognized by Forbes among in-state wealth advisors before his downfall.
FINRA Permanent Bar
- On March 27, 2025, FINRA issued an Acceptance, Waiver & Consent (AWC), permanently barring Seruya from associating with any FINRA broker-dealer or firm.
- The bar resulted from his refusal to provide documents and information to FINRA during an investigation into his undisclosed outside business activities and use of non‑firm messaging platforms.
Arbitration & Complaint History
1. 1999 NASD Arbitration with Bear Stearns
- Seruya and co-respondents were ordered to pay $1,375,750 for negligence and failure to supervise client options trading; punitive damages were denied.
2. 2025 Customer Complaint
- A later complaint (likely with Morgan Stanley) noted allegations connected to undisclosed outside business activity, improper communications, and breach of policy; it led to his eventual bar.
Alleged Investor Harm & Fraud Claims
- Financial watchdog sites report wrongdoing, including unauthorized, high‑risk trading, offshore accounts, falsified statements, and targeting of elderly clients.
- One alleged victim, a retired physician, reportedly lost $750,000 due to Seruya’s misconduct.
When Does FINRA Bar Someone?
The Financial Industry Regulatory Authority (FINRA) is a self-regulatory organization that oversees broker-dealers and their registered representatives in the United States. One of its most serious enforcement actions is issuing a “bar”—permanently prohibiting an individual from associating with any FINRA-member firm in any capacity. This is the strongest penalty FINRA can impose, and it is reserved for the most severe violations of securities industry rules, regulations, and ethical standards.
Grounds for a FINRA Bar
A FINRA bar typically arises from serious misconduct, such as:
- Fraud or Misrepresentation: This includes making false statements to clients, misusing customer funds, or engaging in deceptive investment schemes.
- Failure to Cooperate with Investigations: If a registered representative refuses to respond to a FINRA request for testimony, documents, or other information during an investigation, FINRA can impose an automatic bar under Rule 8210.
- Unauthorized Trading: Executing trades in customer accounts without proper authorization is a violation that can lead to barring.
- Outside Business Activities (OBA) or Selling Away: Engaging in undisclosed business or investment activities outside the firm’s purview, especially if they involve client funds or present a conflict of interest.
- Conversion of Funds: Misappropriating or stealing money from clients or firms is a surefire way to face permanent expulsion.
- Repeated or Egregious Rule Violations: Individuals with a history of disciplinary issues or whose conduct shows a clear disregard for regulatory compliance may be barred to protect investors.
The Process
Before imposing a bar, FINRA typically conducts an investigation. If misconduct is found, FINRA may offer a settlement (AWC – Acceptance, Waiver, and Consent), in which the individual neither admits nor denies wrongdoing but accepts sanctions. If no settlement is reached, the case proceeds to a hearing before FINRA’s Office of Hearing Officers, where a bar may be ordered based on findings.
Consequences of Being Barred
A FINRA bar is permanent and public, recorded on the individual’s BrokerCheck profile. Once barred, the person cannot re-enter the industry, work at a FINRA-member firm, or engage in brokerage activities requiring registration. It is a career-ending action in the securities industry and serves as a powerful tool to maintain market integrity and protect investors.
In short, FINRA bars individuals who pose a substantial risk to investors or the reputation of the financial markets, typically after serious misconduct or refusal to cooperate with regulatory oversight.
Can You Work with a Banned Wealth Advisor?
When a financial advisor is banned or barred from the securities industry by a regulatory authority such as FINRA (Financial Industry Regulatory Authority) or the SEC (Securities and Exchange Commission), it is a serious red flag. These bans are not issued lightly—they follow findings of serious misconduct, such as fraud, theft, misrepresentation, unauthorized trading, or refusal to cooperate with investigations. So, what happens if you’re considering working with or continuing a relationship with someone who has been banned? Let’s explore the risks, regulations, and realities.
What Does “Banned” Mean?
A banned or barred wealth advisor is someone who has been permanently prohibited from working with any FINRA-registered firm or operating in any capacity within the regulated securities industry. This bar is typically issued through disciplinary actions and is publicly recorded in the advisor’s BrokerCheck or Investment Adviser Public Disclosure (IAPD) profile.
A barred advisor:
- Cannot legally sell securities or give regulated investment advice.
- Cannot associate with any FINRA-member firm.
- May still call themselves a “financial coach” or offer unregulated advice but without fiduciary protections or oversight.
Is It Legal to Work With Them?
Technically, yes, in limited contexts. A banned advisor might work in unregulated areas like budgeting, general financial education, or tax preparation—activities that don’t require a license. But here’s the problem: there’s no regulatory oversight in those cases, and your protections as a client are significantly reduced.
If a banned advisor is still offering services that resemble investment advising, securities trading, or portfolio management, they are operating illegally. Working with them could expose you to legal and financial risk, especially if they solicit investments, make trades, or handle your funds directly.
Risks of Working With a Banned Advisor
- No Regulatory Oversight
There is no governing body to monitor their actions or protect your rights. - Lack of Fiduciary Duty
They are not held to fiduciary or suitability standards enforced by FINRA or the SEC. - Limited Recourse
If you suffer losses due to their actions, you cannot pursue claims through FINRA arbitration, which is a standard investor protection process. - Potential Fraud
Many barred advisors have a history of misconduct. Continuing to work with them may expose you to further unethical behavior.
How to Protect Yourself
- Check BrokerCheck or IAPD to verify an advisor’s status.
- Avoid any financial professional who has been barred from regulated activity.
- Report violations to FINRA or the SEC if a banned advisor is still offering investment services.
- Seek a licensed and accredited financial advisor with a clean regulatory record.
While it may be legal in limited circumstances to interact with a banned wealth advisor, it is almost always inadvisable. Regulatory bans are a major warning sign. Your financial future deserves the care of a qualified, monitored, and accountable advisor. Always verify an advisor’s credentials and don’t hesitate to walk away if something feels off your money and your peace of mind are worth it.
Understanding FINRA Enforcement
The Financial Industry Regulatory Authority (FINRA) is the primary self-regulatory body for broker-dealers and registered representatives in the U.S. Through its enforcement program, FINRA investigates potential violations of securities laws, misconduct, and ethical lapses ultimately issuing fines, suspensions, and bars to maintain integrity and protect investors.
Recent Enforcement Statistics (2024)
According to FINRA’s own data for 2024:
- New disciplinary actions filed: 730 (up from 610 in 2023).
- Individual bar sanctions: 182 (up slightly from 178 in 2023).
- Individual suspensions: 354 (compared to 257 in 2023).
- Firm expulsions/suspensions: 4 each.
- Fines & disgorgement ordered: $75.6 million (down from $103.2M in 2023).
- Restitution ordered: $24.0 million (up sharply from $7.5M in 2023).
FINRA imposed $59.8 million in fines in 2024 and funded $89.3 million through fine-eligible expenditures including education and technology initiatives.
Types of Enforcement Actions
FINRA enforcement employs a range of disciplinary tools:
- Public censures
- Fines (ranging from thousands to millions)
- Suspensions: limiting a person’s role in broker-dealer activities
- Bars: permanent bans from industry participation, often issued under Rule 8210 when individuals fail to cooperate.
High-profile sanctions in 2024 included numerous bars tied to refusing document production or testimony e.g., brokers like Tracy Longstreet, Armando Vargas, and others were barred under such circumstances.
Notable Enforcement Trends
Rising Discipline Volume
There was a 22% increase in disciplinary actions (from 453 to 552) in 2024, showing heightened enforcement vigor.
Restitution and Fines
Restitution orders more than tripled in a year, signaling a shift toward prioritizing investor recovery. At the same time, total monetary penalties and disgorgement fell from 2023 but remained significant at $75.6 million.
High-Profile Cases
- Mutual fund fee rebates: FINRA required Edward Jones, Osaic Wealth, and Cambridge Investment Research to reimburse a combined $8.2 million to clients for failing to pass through rebates, without imposing fines due to their cooperation.
- Bond trading compliance: A broker-dealer was disciplined for unfair markups and lack of best-execution systems in corporate bond trades.
Ongoing Concerns
Despite increased enforcement efforts in 2024, critics have raised concerns:
- A drop in overall fines from the record $173.8 million in 2016 to $88.4 million in 2023 has sparked debate about whether deterrence has weakened.
- Senate inquiries (included in Elizabeth Warren’s letter) question whether enforcement remains sufficiently aggressive despite a reduction in enforcement volume.
Looking Ahead
FINRA continues to focus on:
- Ensuring firms adhere to new rules—like best execution, communications, and fee transparency.
- Boosting investor protection by prioritizing restitution and removing high-risk individuals via bars.
- Expanding its technological capabilities and public education efforts using fine-funded initiatives.
Conclusion
FINRA’s enforcement metrics for 2024 reveal a more assertive and impactful regulatory stance. With increased disciplinary actions, a strong push for restitution, and resources allocated toward compliance and education, FINRA appears committed to strengthening market integrity—even as debates continue over penalty scale and scope.
