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Paychex Securities Advisor Penalized for Undisclosed Referral Agreement with RIA

Posted on December 13th, 2024 at 8:59 AM
Paychex Securities Advisor Penalized for Undisclosed Referral Agreement with RIA

From the desk of Jim Eccleston at 麻花传媒

A former advisor has agreed to a $7,500 fine and a six-month suspension following allegations of failing to disclose a referral agreement with an outside registered investment advisory (RIA) firm.

From July 2017 to February 2023, Michael Shoniker earned $740,000 by referring 401(k) customers to the RIA. According to AdvisorHub, the payments represented a portion of advisory fees collected from 96 Paychex clients he referred. Paychex allowed its advisors to make referrals but prohibited them from receiving finder’s fees, advisory fees, or commissions without prior approval.

FINRA alleged that Shoniker violated the firm's policies and FINRA Rule 3270, which prohibits advisors from engaging in outside business activities without written approval. The regulator also cited a breach of Rule 2010, which requires advisors to adhere to high standards of commercial honor.

Shoniker neither admitted nor denied FINRA’s findings as part of the settlement agreement, known as an Acceptance, Waiver, and Consent (“AWC”). The investigation originated from a Form U5 termination notice filed by Paychex in February 2023.

 

麻花传媒 LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

Tags: eccleston, eccleston law

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