FINRA Filed An Enforcement Action Against Former IFS Securities Broker Steven Schisler For Allegedly Selling Away
Steven Schisler (CRD#: 2367961) is a former Registered Broker at IFS Securities in Grassvalley, CA. He entered the securities industry in 1993 and previously worked for Sterne Agee Financial Services, Inc.; Synergy Investment Group, LLC.; Pension Planners Securities, Inc.; Washington Square Securities, Inc.; Sunset Financial Services, Inc.; Sunamerica Securities, Inc.; and Chubb Securities Corp.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in April 2021, FINRA Department of Enforcement requested that relief against Steven Schisler include a requirement to disgorge ill-gotten gains, make full and complete restitution together with interest, pay for the fair and appropriate costs of the proceedings. The FINRA complaint states, “From April 2009 to October 2020, Steven D. Schisler committed nine separate violations of FINRA and NASD rules as a result of his dealings with two sets of retired customers and his member firm. Specifically, he (1) made an unsuitable recommendation to two elderly, married customers; (2) participated, without the approval of his firm, in a private securities transaction with those customers; (3) willfully failed to timely amend his Uniform Application for Securities Industry Registration or Transfer (Form U4) to disclose a civil complaint and arbitration filed by one of the elderly customers, as well as other reportable events; (4) entered into a settlement agreement with the customer that contained a prohibited condition — namely, that she would support his request for expungement; (5) lied under oath at the expungement hearing; (6) lied during on-the-record testimony to FINRA’s Department of Enforcement; (7) engaged in a long pattern of unethical business conduct towards another retired customer from whom Schisler solicited a personal loan that he failed to repay for over six and a Department of Enforcement, Complainant, v. Steven Douglas Schisler CRD No. 2367961, Respondent. half years after maturity; (8) made a false statement on a firm compliance questionnaire; and (9) caused his fn-m to fail to preserve books and records by using outside, unmonitored email accounts to conduct securities business. “
For a copy of the FINRA complaint, click here.
The Financial Industry Regulatory Authority (FINRA) strictly prohibits financial advisors from “selling away” or selling securities and investments to clients that are not offered by the brokerage firm with which they are employed. For example, it is illegal and a violation of industry rules for a financial advisor to recommend or even suggest that a client invest in the financial advisor’s own business or a business operated by his or her friends or family. It is not necessary that the financial advisor earn any compensation for recommending an outside investment.
The purpose behind this prohibition is to ensure that a financial advisor only offers to sell securities that have been vetted by his or her employer brokerage firm through a rigorous due diligence process. Most brokerage firms have an approved list of investments, products, and research that can be provided or made available to clients. Any deviation by the financial advisor from the approved product list may constitute selling away.
In addition, Steven Schisler has been the subject of four disclosures, including one that remains pending, including the following:
● March 2017—”Failure to return Trust Assets, Conversion, Breach of Fiduciary duty, Money had and Received.” The civil complaint remains pending.
● May 2004—”CLIENTS PURCHASED TWO VARIABLE LIFE POLICIES FROM REPRESENTATIVE. THEY ARE ALLEGING THAT REPRESENTATIVE MADE MISREPRESENTATIONS ABOUT POLICY LOANS AND POLICY FEATURES. THEY ARE SEEKING UNSPECIFIED DAMAGES BASED ON ALLEGED IMPROPER ADVICE.” The customer dispute was denied.
● February 1996—A civil judgment/lien of $245 was levied against Steven Schisler.
● August 1981—”FELONY: UNLAWFUL POSSESSION OF A WEAPON (UPWI), CONTROLLED SUBSTANCE DELIVERANCE (DCS II).” The criminal conviction was resolved through a combination of probation, community service, and a fine.
For a copy of Steven Schisler’s FINRA BrokerCheck, click here.
Financial advisors have a legal and regulatory obligation to recommend only suitable investments that are appropriate for their clients’ needs and objectives. Their employing brokerage firm has a legal and regulatory obligation to supervise the Financial Advisors’ sales practices and dealings with clients. To the extent any of these duties are breached, the customer may be entitled to a recovery of his or her investment losses.
Reasonable basis suitability requires that a recommended investment or investment strategy be suitable or appropriate for at least some investors. Reasonable basis suitability requires an advisor to conduct adequate due diligence so that he or she can determine the risks and rewards of the investment or investment strategy.
Quantitative suitability requires a brokerage firm or financial advisor with actual or de facto control over a customer’s account to have a reasonable basis for believing that a series of recommended transactions—even if suitable when viewed in isolation—is not excessive and unsuitable for the customer when taken together in light of the customer’s investment profile. No single test defines excessive activity, but factors such as the turnover rate, the cost-equity ratio, and the use of in-and-out trading in a customer’s account may provide a basis for a finding that a member or associated person has violated the quantitative suitability obligation.
Customer-specific suitability requires that a member or associated person have a reasonable basis to believe that the recommendation is suitable for a particular customer based on that customer’s investment profile. Among the criteria that a financial advisor must evaluate to satisfy his or her customer-specific suitability obligations include the investor’s agee, tax status, time horizon, liquidity needs, and risk tolerance; a client’s other investments, financial situation and needs, investment objectives, and any other information disclosed by the customer should also be considered.
The Wolper Law Firm represents investors nationwide in securities litigation and arbitration on a contingency fee basis. Matt Wolper, the Managing Principal of the Wolper Law Firm, is a trial lawyer who has handled hundreds of securities cases during his career involving a wide range of products, strategies and securities. Prior to representing investors, he was a partner with a national law firm, where he represented some of the largest banks and brokerage firms in the world in securities matters. We can be reached at (800) 931-8452 or by email at firstname.lastname@example.org.
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