A client filed a dispute on 2/4/2019 alleging that she gave Pina a check for $20,000, under the impression that it was to be invested. The firm settled for the damages requested, which was $20,000.
On 3/7/2019, PFS Investments allowed Pina to resign after he admitted borrowing $20,000 from a client. The firm terminated his registration in a Form U5 filed with FINRA, disclosing the circumstances of his termination. Based on the Form U5, FIRNA began its investigation.
FINRA found that while Pina was associated with PFS, he borrowed a total of $72,000 from four of his clients. This is a violation of a number of FINRA rules, including Rule 3240, which prohibits borrowing from clients except under strict rules. PFS’s policy strictly prohibited borrowing money from clients under any circumstances.
Pina used an entity over which he had control to borrow the money from his four PFS customers. He issued an oral promise to repay the principal and a mutually agreed amount of interest on each amount. Additionally, Pina did not execute a loan agreement or other written instrument to document these loans.
Stockbrokers Like Michael Pina Are Not Permitted to Borrow Money From Customers
Two of the PFS clients have been repaid in full as Pina promised. However, Pina still owed money to the other two clients at the time of the suspension. He owed $7,500 of principal to one client and $12,300 in principal to another.
In January of 2019, Pina also failed to disclose these loans to PFS in the firm’s annual compliance questionnaire. He falsely claimed that he had not borrowed any money from any firm client, either his own or someone else’s.
As part of the sanctions imposed by FINRA, Pina is subject to:
- A 16-month suspension from association with any FINRA member in any capacity
- An administrative fine of $10,000
- Restitution for both clients in the amount of $19,800
Under the terms of the Acceptance, Waiver & Consent letter Pina signed, his suspension began on October 5, 2020, and ends on 2/4/2022.
Securities Arbitration Lawyers
Our securities and investment fraud attorneys have handled hundreds of stockbroker misconduct cases representing investors in FINRA arbitration claims and other disputes. FINRA arbitration, commonly referred to as securities arbitration, is a way most stockbroker misconduct cases are resolved. The SEC mandates that all brokerage firms submit customer disputes to arbitration. Customer new account agreements typically require the customer to also agree to the process.
The FINRA code of arbitration dictates the procedure which is intended to be faster and cheaper than going to court. Our attorneys have recovered millions of dollars for investors and are fully familiar with the unique language and requirements of the code of arbitration.
Our attorneys are admitted in New York and Florida and represent investors nationwide. Scott Silver, has written numerous articles on the FINRA arbitration process and frequently lectures young lawyers at conferences and law schools around the nation about the securities arbitration process. If you are looking for a FINRA arbitration attorney or believe you are the victim of securities or investment fraud, our attorneys are happy to consult with you at no cost to discuss your options.
Have You Invested With Michael Pina?
Silver Law Group represents investors in securities and investment fraud cases. Our lawyers are admitted to practice in New York and Florida and represent investors nationwide to help recover investment losses due to stockbroker misconduct. If you have any questions about how your account has been handled, call to speak with an experienced securities attorney. Most cases are handled on a contingent fee basis, meaning that you won’t owe us until we recover your money for you. Contact us today and let us know how we can help.