Ex-Schwab Representative Suspended Two Years and Fined for Concealing Profit-Sharing Agreement
From the desk of Jim Eccleston at Eccleston Law
The Financial Industry Regulatory Authority (FINRA) has suspended former Charles Schwab & Co. Inc. representative Daniel Michael Roper for two years. As reported by ThinkAdvisor, FINRA has fined him $15,000, and ordered him to pay $80,747 in disgorgement plus interest for concealing a profit-sharing arrangement with a Schwab client, according to a FINRA acceptance, waiver and consent letter.
Roper registered with FINRA in March 2019 through his association with Schwab. The firm filed a Form U5 on September 15, 2023, disclosing that a client had alleged Roper traded the client’s account in exchange for a share of the profits. Roper had voluntarily terminated his association with Schwab on August 30, 2023.
FINRA found that, from October 2020 through January 2022, Roper executed more than 14,000 equity trades and 6,300 options trades in the client’s self-directed Schwab retail account without written authorization from either the client or Schwab. Roper also failed to have the account accepted as discretionary.
FINRA determined that Roper violated FINRA Rules 2150(c), 3260(b), and 2010 by entering into a profit-sharing agreement and exercising discretion in the client’s account without authorization. According to ThinkAdvisor, the regulator further found that Roper used unapproved communication channels, including personal text messages and email, to conceal his conduct.
According to the order, Roper accessed the client’s Schwab account using the client’s login credentials, communicated outside of Schwab’s approved channels, and received profit-sharing payments through accounts held away from Schwab. In total, Roper received $80,747 in payments under the arrangement.
FINRA also noted that Roper falsely certified the completeness and accuracy of his disclosures in Schwab’s annual compliance questionnaires in 2021 and 2022, failing to disclose the client account over which he exercised discretion.
Roper must re-qualify by examination before re-registering as a general securities representative.
Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.
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