FINRA Suspends Advisor Who Helped His Barred Father Service Clients

Posted on March 3rd, 2021 at 1:19 PM
FINRA Suspends Advisor Who Helped His Barred Father Service Clients

From the Desk of Jim Eccleston at Eccleston Law LLC:

The Financial Industry Regulatory Authority (FINRA) fined and suspended James Schumaker, an independent advisor. According to the finalized settlement, the Indiana-based advisor violated FINRA's "catch-all" Rule 2010 that requires "high standards of commercial honor."  The advisor allegedly assisted his barred father continue to work with clients. The advisor agreed to pay a $5,000 fine in addition to serving a nine-month suspension.  

According to FINRA, Schumaker permitted his father to attend client meetings, discuss brokerage account strategies, and engage in email communication with customers. The father-son duo also maintained an office and shared a phone line at the Cambridge Investment Research (Cambridge) branch location. During a branch audit in 2018, examiners at Cambridge found Schumaker's father on the premises, warned Schumaker that his father's presence was not allowed, and cautioned that he could not provide any investment advice. The advisor confirmed that he understood. However, in February 2019, Cambridge found the eldest Schumaker meeting with a customer in the conference room, according to FINRA.   

The elder Schumaker served as an advisor for 24 years before his industry bar. FINRA barred him from the industry after failing to cooperate with an investigation into allegations that he misappropriated around $8,200 while serving as treasurer of a homeowner's association. The eldest Schumaker did not disclose his removal from the industry to his clients. Instead, his son, James, took over his accounts in 2018. 

Eccleston Law LLC represents financial advisors nationwide. Please contact us to discuss any issues that you may have.

Tags: eccleston, eccleston law, finra, family affair

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We just wanted to say thanks for your work in helping us get back some of the money we lost. We are not by any means rich, but we have saved some money and we have done so through a tight-fisted approach to most everything we do. So losing a significant chunk of money hurt…especially at a time when everyone else was growing their accounts. We really appreciate the work you did.

Allan and Adele


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