Firm expelled from FINRA membership for allowing broker to work while suspended


Financial Industry Regulatory Authority (FINRA) announced today that a FINRA hearing panel permanently barred broker Bruce Martin Zipper of Miami, FL, for continuing to conduct firm business while serving a three-month suspension. The hearing panel also expelled his firm, Dakota Securities, from FINRA membership for not adequately supervising Zipper, allowing him to associate while suspended (and later while statutorily disqualified) and for falsifying books and records. The decision resolves charges brought by FINRA’s Department of Enforcement in November 2017.

In April 2016, Zipper entered into a settlement with FINRA’s Department of Enforcement agreeing to pay a $5,000 fine and serve a 3-month suspension for failing to disclose three outstanding judgments. At the time, Zipper was a principal at a Dakota Securities, a small broker-dealer that operated as a “one man shop” where Zipper wore “all the hats.” After agreeing to the settlement, Zipper notified FINRA that he was bringing another broker into his firm to conduct firm business during his suspension. Yet after his suspension started in May 2016, Zipper never stopped his association with Dakota as Zipper continued soliciting Dakota customers, doing business with the firm’s clearing broker, and generally operating the firm.

In its disciplinary complaint, FINRA’s Department of Enforcement charged Zipper with violating his settlement agreement. The complaint also charged Dakota with allowing Zipper to associate with the firm while suspended and statutorily disqualified, failing to implement adequate supervisory procedures, and maintaining false books and records.

The panel concluded in its decision, “We find that there is no question that Zipper violated his suspension by associating with Dakota” in breach of his settlement.” It noted that during the suspension, Zipper regularly communicated with Dakota’s clearing firm and vendors regarding the firm’s ongoing operations, and with several firm customers in order to provide customers access to the firm’s website, their brokerage statements and other records, as well as Zipper’s investment analysis and recommendations that led to securities purchases. During the latter part of his suspension in August 2016, Zipper personally negotiated a settlement in an arbitration case against Dakota.

The decision found “the firm knew that Zipper was continuing to associate with it while he was suspended. Zipper conducted Dakota business over firm e-mails; he entered trades in firm systems; he directed services from the firm’s vendors. Indeed, there is little evidence in the record that anyone other than Zipper managed firm business during Zipper’s periods of disqualification. And Dakota took no action to stop the misconduct.”

Unless the hearing panel’s decision is appealed to FINRA’s National Adjudicatory Council (NAC), or is called for review by the NAC, the hearing panel’s decision becomes final after 45 days.

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Firm expelled from FINRA membership for allowing broker to work while suspended

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