Securities Arbitration Lawyer Blog
The Financial Industry Regulatory Authority’s Department of Enforcement has filed a disciplinary proceeding complaint against former broker Steven Schisler. The complaint alleges that from April 2009 to October 2020, Steven Schisler committed nine separate violations of FINRA and NASD rules related to his dealings with two sets of retired customers and IFS Securities, the firm that employed him. Specifically, the FINRA complaint alleges:
- made an unsuitable recommendation to two elderly, married customers;
- participated, without the approval of his firm, in a private securities transaction with those customers;
- 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;
- entered into a settlement agreement with the customer that contained a prohibited condition — namely, that she would support his request for expungement;
- lied under oath at the expungement hearing;
- lied during on-the-record testimony to FINRA’s Department of Enforcement;
- engaged in a long pattern of unethical business conduct towards another retired customer from whom Mr. Schisler solicited a personal loan that he failed to repay for over six and a half years after maturity;
- made a false statement on a firm compliance questionnaire; and
- caused his firm to fail to preserve books and records by using outside, unmonitored email accounts to conduct securities business.
If you or a loved one were a customer of broker Steven Schisler or IFS Securities, contact securities arbitration law firm Iorio Altamirano LLP for a free and confidential review of your legal rights.
FINRA Disciplinary Proceeding No. 2018058718601
On April 13, 2021, the FINRA Department of Enforcement filed a complaint against broker Steven Schisler. The complaint includes the following allegations:
- In September 2014, Schisler persuaded an elderly, retired, married couple to invest $300,000 in a promissory note to finance a commercial property. That recommendation was not suitable for the customers. The $300,000 was a substantial portion of their retirement savings, and they depended upon those funds to pay down considerable debt. They also had few alternative sources of income in retirement. The recommended investment was a security and, by its own terms, was limited to accredited investors, which the married couple were not. Moreover, Mr. Schisler did not perform the diligence necessary to provide him with a reasonable basis to recommend the investment to his customers. Had he conducted even a cursory internet search, he would have learned that one of the two partners issuing the note had been barred from the securities industry for defrauding investors. By recommending an unsuitable investment, Mr. Schisler violated FINRA Rules 2111 and 2010.
- Schisler facilitated the elderly couple’s investment in the note by, among other things, recommending the investment to them, arranging and participating in a meeting in his own office between them and the issuer, and receiving a $9,500 finder’s fee from the issuer in connection with the transaction. Mr. Schisler participated despite repeated and explicit instruction from his firm that he could not do so. By participating in a private securities transaction without approval from his member firm, Schisler violated NASD Rule 3040 and FINRA Rule 2010.
- When the $300,000 note became due in September of 2016, the issuer defaulted. One of the customers died a few months earlier, and the remaining widow brought a civil lawsuit against Mr. Schisler and others involved in the investment and, subsequently, a FINRA arbitration against Mr. Schisler. Mr. Schisler willfully failed to timely amend his Form U4 to report either the civil lawsuit or the arbitration, despite repeated instructions from his member firm to do so. Schisler also willfully failed to timely amend his Form U4 to disclose the subsequent resolutions of the civil lawsuit and arbitration, as well as his receipt of a Wells Notice advising him that he was the subject of a FINRA investigation. By these willful disclosure failures, Schisler violated Article V, Section 2(c) of FINRA’s By-Laws and FINRA Rules 1122 and 2010.
- In January 2019, Mr. Schisler executed a settlement agreement with the elderly widow to resolve both her civil lawsuit and FINRA arbitration. Under the terms of the settlement, Mr. Schisler improperly required her to execute a declaration to support his request for expungement. By entering into a settlement with this prohibited condition, Schisler violated FINRA Rules 2081 and 2010.
- During the FINRA arbitration panel’s April 29, 2019 hearing on Mr. Schisler’s request for expungement, Mr. Schisler lied to the panel about his involvement in the promissory note, falsely testifying that he did “not personally” introduce the customers to the issuer and otherwise mischaracterizing the nature of his involvement with the note. In so doing, Schisler violated FINRA Rule 2010.
- On February 19, 2020, Mr. Schisler similarly provided false testimony to FINRA’s Department of Enforcement. During on-the-record testimony taken pursuant to FINRA Rule 8210, Mr. Schisler repeatedly and falsely testified that the $9,500 finder’s fee he received in connection with the promissory note investment was a “personal loan” and that he was unaware at the time that Customers H and E had made the investment. By lying during his testimony taken pursuant to FINRA Rule 8210, Schisler violated FINRA Rules 8210 and 2010.
- Schisler’s unethical misconduct extended to another elderly, retired customer. On April 9, 2009, Mr. Schisler solicited the elderly customer to lend him $50,000 in the form of a promissory note that was secured by mortgaged property on the verge of default. Mr. Schisler defaulted on the mortgage a few days after he issued the note to the elderly customer, and he subsequently lost the property through foreclosure. Mr. Schisler failed to disclose both the default and subsequent foreclosure to his elderly customer and then failed to repay her the $50,000 principal and the accrued interest for more than six years after the note matured. Mr. Schisler unilaterally extended the maturity date and repeatedly assured the elderly customer that payment would be forthcoming, only to renege on his promises without justification. After years of unjustified delays and still owing most of the original principal, Mr. Schisler finally repaid Customer P in October 2020. By engaging in this unethical business conduct towards a customer, Schisler violated FINRA 2010.
- When Mr. Schisler joined a new firm in May 2012, he brought the elderly customer with him. At that time, Mr. Schisler falsely responded “no” to a question on the firm’s questionnaire asking whether he had borrowed money from any current or former customers. In fact, Mr. Schisler had borrowed money from two customers, including the elderly customer. In so doing, Schisler violated FINRA Rule 2010.
- Finally, on 44 occasions, Mr. Schisler used non-firm email accounts not copied, captured, or supervised by his firm to communicate with customers regarding securities-related business. By causing his firm to fail to preserve required books and records, Schisler violated FINRA Rules 4511 and 2010.
Financial Advisor Steven Douglas Schisler (CRD No. 2367961)
Mr. Schisler, who is no longer registered with any brokerage firm, had 25 years of experience in the securities industry and has been associated with the following firms:
- IFS Securities in Grass Valley, California, from June 2012 to September 2019.
- Sterne Agee Financial Services, Inc. in Birmingham, Alabama, from March 2012 to May 2012.
- Synergy Investment Group, LLC in Grass Valley, California, from August 2004 to March 2012.
- Pension Planners Securities, Inc. in Sacramento, California, from October 2003 to August 2004.
- Washington Square Securities, Inc. in Des Moines, Iowa, from March 1999 to August 2003.
- Sunset Financial Services, Inc. in Kansas City, Missouri, from January 1998 to March 1999.
- SunAmerica Securities, Inc. in Phoenix, Arizona, from August 1995 to January 1998.
- Chubb Securities Corporation in Fort Wayne, Indiana, from August 1993 to December 1995.
Mr. Schisler has also been affiliated with a business named Synergy Wealth Management LLC.
In 2017, a customer filed a litigation complaint in Nevada state court, alleging the failure to return trust assets, conversion (theft), and breach of fiduciary duty. The dispute is still pending.
According to public records, in 1981, Mr. Schisler was convicted of Unlawful Possession of a Weapon, a felony. He was sentenced to three years’ probation, 80 hours of community services, and fined.
IFS Securities – Supervisory Duties
Brokerage firms like IFS Securities must properly supervise financial advisors and customer accounts. Brokerage firms must also establish and maintain a reasonably designed system to oversee account activity, such as unsuitable trades, to ensure compliance with securities laws and industry regulations. When a brokerage firm fails to sufficiently supervise their financial advisors or the investment account activity, it may be liable for investment losses sustained by customers.
How to Recover Financial Losses or Obtain a Free Consultation
If you or a loved one were a customer of Steven Schisler or IFS Securities and either sustained financial losses or suspect that Mr. Schisler did not have your best interest in mind when recommending investments or making account transactions, contact New York securities arbitration attorney August Iorio of Iorio Altamirano LLP. August Iorio can be reached at august@ia-law.com or toll-free at (855) 430-4010 for a free and confidential evaluation of your account.
Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. Iorio Altamirano LLP pursues FINRA arbitration claims nationwide on behalf of investors to recover financial losses arising out of wrongful conduct by stockbrokers and brokerage firms.