If you don't think it's happening to you, I'll guarantee you, it's happening to you.

"Brokers with Checkered Histories Cast Doubt on FINRA Enforcement Efforts"

The article, published in Financial Planning on December 5, 2025, critiques the Financial Industry Regulatory Authority (FINRA)'s effectiveness in policing brokers with histories of misconduct, arguing that persistent gaps allow "recidivist" advisors to continue operating and harm investors. It highlights how FINRA's BrokerCheck database often fails to flag recent allegations promptly, firms lack robust supervision for high-risk hires, and regulatory responses are reactive rather than preventive. Drawing on a 2019 academic study, the piece notes that brokers with prior offenses are five times more likely to reoffend, yet only about 1.7% of FINRA-member firms (61 out of 3,582 in 2018 data) would face restrictions under a proposed new rule awaiting SEC approval. This rule would mandate "high-risk" firms to set up restricted deposit accounts for potential arbitration payouts but is criticized for narrow scope, loopholes, and limited public transparency.

Key criticisms include: 

• Slow Detection and Disclosure: Regulators and firms often act only after significant harm, with BrokerCheck omitting arrests or indictments until formal convictions. 

• Inadequate Supervision: "Principles-based" guidelines don't enforce mandatory heightened oversight for risky brokers, per experts like attorney Christine Lazaro. 

• Industry Frustrations: Consumer advocates, such as Lev Bagramian of Better Markets, call FINRA's efforts a failure to "clean up the worst of the worst," while attorneys like Joe Peiffer decry pre-harm inaction.

  
  

The article spotlights three stark examples of unchecked brokers (from pre-2025 cases, underscoring long-term patterns): 

• Gregory Frank Estes: A Texas broker with a 2001 sexual assault conviction, 2006 termination, and 2016 $95,000 investor settlement, arrested again in late 2020 for child assault—yet BrokerCheck omitted the new charges, and he remained active for over a month. 

• Keith Todd Ashley: Fired in 2020 for undisclosed side activities, later arrested for wire fraud and indicted for murder; BrokerCheck ignored these, listing only a dismissed 1991 forgery charge. 

• GPB Capital Scandal: A $1.8 billion Ponzi-like scheme defrauding 17,000 investors; key figures like Jeffry Schneider (20 disclosures) and Mark Martino (10 disclosures) continued in the industry post-allegations.

FINRA defends its work—barring hundreds annually and emphasizing exams—but the piece portrays enforcement as reactive, urging stronger, mandatory safeguards.

Beyond the Brokers: The Firms as the Root of the Problem

While individual brokers and self-proclaimed "advisors" or "wealth managers" bear direct responsibility for fraudulent sales, the systemic issues originate higher up the chain with Wall Street firms, major banks, insurance companies, and even smaller broker-dealers. These institutions design and distribute conflicted, high-expense products that prioritize profits over investor interests, often mandating their sale through embedded incentives like commissions, revenue-sharing agreements, and proprietary funds. For instance, investment banks have historically engineered complex, high-risk securities—such as mortgage-backed securities and collateralized debt obligations (CDOs)—while simultaneously betting against them, creating inherent conflicts where firm gains come at client expense. Banks and insurance giants amplify this by cross-selling bundled products, like variable annuities tied to high-fee mutual funds, where upfront commissions (often 5-7% of premiums) encourage unsuitable recommendations to retail clients, including seniors nearing retirement. Smaller broker-dealers, often acting as intermediaries, exacerbate the issue by aggressively pushing these "crummy" products—such as non-traded REITs, unit investment trusts (UITs), and variable interest rate structured products (VRSPs)—without adequate due diligence, leading to FINRA findings of supervisory failures and Reg BI violations in 2025 exams. In short, the firms set the conflicted incentives at the top, turning brokers into de facto salespeople for overpriced, opaque vehicles that erode returns through layered fees (e.g., 2-3% annual expenses on "alternative" funds) while providing illusory diversification or guarantees.

The Barred Broker Loophole: Shifting to Insurance and Annuities

Even when FINRA bars problematic brokers—a self-regulatory body overseen but not always rigorously enforced by the SEC—many simply pivot to state-regulated insurance channels, obtaining licenses to sell equity-indexed annuities (EIAs) and other "crappy" products with fewer federal safeguards. A 2025 study reveals that 92% of brokers who dropped FINRA registrations amid heightened scrutiny (e.g., post-2021 rules requiring approval for hiring those with misconduct disclosures) retained insurance licenses, with 76% authorized for variable annuities—hybrid securities/insurance products prone to high surrender charges (up to 10% in early years) and illiquidity. These EIAs, often marketed as "safe" retirement havens, cap upside potential while exposing consumers to downside risk without commensurate protections, leading to a surge in complaints (variable annuities topped FINRA's 2025 investor grievance list). State oversight lags federal standards, with no equivalent to BrokerCheck for real-time disclosure of prior bars, allowing "recidivists" to target vulnerable clients anew—perpetuating harm in a fragmented regulatory landscape. This "revolving door" underscores calls for unified SEC-state coordination, as echoed in FINRA's 2025 Oversight Report.

2025 FINRA Enforcement Highlights: Evidence of Proactive (Yet Imperfect) Action

While the article raises valid doubts about systemic flaws, 2025 FINRA records show a ramp-up in disciplinary actions, with monthly reports detailing fines, suspensions, bars, and censures for violations like supervisory failures, fraud, and non-cash compensation abuses. FINRA published its 2025 Annual Regulatory Oversight Report in January, expanding coverage to 24 topics (up from prior years), including new emphases on third-party risks, cybersecurity, AI in trading, and investment fraud—signaling heightened scrutiny. The report aggregates insights from over 380 investigators and emphasizes "effective practices" for firms, like robust surveillance for manipulative trading. Enforcement Chief Bill St. Louis noted in a related podcast that while not all probes lead to action, the focus is on "rooting out bad actors" via referrals from exams and tips, with efficiency improvements accelerating cases.

Total actions aren't aggregated yet (as of December 2025), but monthly PDFs reveal consistent enforcement: e.g., January through November reports list dozens of cases, often tied to Reg BI (best interest rule) breaches, retail investor protections, and firm oversight lapses—aligning with the article's concerns but demonstrating tangible interventions. Here's a table of notable 2025 examples, focusing on supervisory failures and recidivism risks (to echo the article's themes), now including firm-level product pushes:

Date/Month	Case Summary	Sanctions	Relevance to Article & Firm Issues
May 2025	First Trust Portfolios L.P. provided excessive gifts/entertainment (e.g., meals exceeding proposed $300 annual limit) to broker-dealers, violating non-cash compensation rules (Rule 2341); also misled clients and lacked supervisory controls on high-expense fund sales.	$10 million fine; supervisory lapses highlighted	Shows FINRA targeting undue influence on recommendations of conflicted products, but reactive—violations spanned 2018–2024, mirroring slow detection critiques and firm-driven incentives for pricey annuities/ETFs.
August 2025	Unnamed small broker-dealer failed TRACE reporting; no surveillance for errors or unreported trades in high-fee structured notes. NAC dismissed some SEC-remanded charges but upheld supervisory failures.	Censure; fines (amounts vary by case); 1-year suspensions for individuals	Underscores supervision gaps for high-risk activities at smaller firms pushing "crummy" products; bars/suspensions for reps—yet only after audits, per article's "post-harm" pattern.
October 2025	Firm violated MSRB Rule G-37(b) on political contributions; another censured for $650,000 in unrelated compliance failures tied to annuity sales quotas. Multiple AWCs for bars in fraud cases involving bank-originated CDOs.	$90,000–$650,000 fines; censures; individual bars	Demonstrates bars for "bad actors," but limited to ~2% of firms under proposed rule, validating narrow scope doubts; highlights bank-firm conflicts in product design.
April 2025	Series of suspensions for unreported outside business activities and disclosure failures in selling EIAs; one small dealer barred for systemic Reg BI non-compliance on variable products.	3–6 month suspensions; $50,000+ fines per case	Ties to recidivist risks—reps with prior disclosures evaded early flags via insurance pivot, echoing BrokerCheck usability issues and firm-mandated high-expense sales.
July 2025	Enforcement against manipulative trading in extended-hours sessions; firms fined for inadequate AI-driven surveillance on insurance-linked derivatives.	$200,000+ fines; 6-month bars for key personnel	From the Oversight Report's new AI focus; proactive via automated surveillance, countering "detection challenges" but still post-violation, with ties to Wall Street's complex product engineering.

These actions barred/suspended dozens of individuals and fined firms millions, per FINRA's database—evidence of "vigorous" efforts (e.g., 2025 proposals raised gift limits to $300 amid abuse findings). However, no 2025 cases directly matched "Nicholas Isone" in searches (possibly a transcription error for a similar name; if it's a specific broker, BrokerCheck queries could clarify).

Overall, 2025 data substantiates the article: enforcement is real and escalating (e.g., fraud/retail focus per Morgan Lewis analysis), but gaps in prevention persist—especially firm-level conflicts and the insurance loophole—making it ripe for radio/TV discussion on investor protections. For your show, frame it as "FINRA's wins vs. the revolving door at the top"—use the GPB example for drama, then pivot to 2025's $10M First Trust fine as a "stiff" counterpoint, and highlight how barred brokers' annuity shifts prey on retirees.

This is Rezny Wealth Management, If you're tired of the conflicts, the mediocre results and the stress your so-called wealth manager is doling out on your financial security—and you're looking for a change—call Rezny Wealth Management. 

There is a substantial difference when you hire a real money management firm that is 100% fiduciary all of the time. Call us today.

General informational content only. Not tax, legal, or investment advice. Consult a financial professional before making investment decisions. Conduct due diligence. All investments involve risk, including potential loss of principal.