Michael Shoniker, a former broker, faced sanctions from the Financial Industry Regulatory Authority (FINRA). FINRA took action against Shoniker for undisclosed compensation linked to fee-sharing deals.
As a result, Shoniker agreed to a six-month suspension from the financial industry. He also accepted a $7,500 fine as part of the settlement.
Shoniker’s case highlights FINRA’s focus on proper disclosure of investment advisory fees. The regulatory body aims to protect investors by enforcing rules about finder’s fees and other forms of compensation.
While Shoniker neither admitted nor denied the claims, his case serves as a reminder of the strict oversight in the financial sector.
Background of Michael Shoniker’s Employment
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Michael Timothy Shoniker worked at Paychex Securities Corp. from September 2015 to February 2023. He served as a regional sales rep for the company during his seven-year stint. Shoniker’s role involved promoting financial products and services to clients in his area.
After leaving Paychex, Shoniker’s career took a new turn. He became a managing partner of a spa franchise in Charlotte. This shift marked a big change from his previous work in investment advisory services.
His move highlights how careers can evolve in unexpected ways.
Allegations Against Shoniker
FINRA accused Michael Shoniker of breaking several rules. He allegedly hid a fee-sharing deal and worked outside his firm without approval.
Undisclosed fee-sharing agreement
Michael Shoniker set up a fee-sharing deal with a third-party investment advisor. He referred retirement-plan clients to this advisor and split the fees earned from about 96 customers.
Shoniker got around $740,000 from this arrangement. This deal started in September 2016 and kept going.
Paychex, Shoniker’s employer, allowed referral payments if approved by the firm. But Shoniker didn’t tell Paychex about his fee-sharing deal. This lack of disclosure broke FINRA rules.
Investment advisors must report outside business activities to their firms. Shoniker’s secret deal with finder’s fees led to trouble with FINRA.
Violation of FINRA Rule 3270
FINRA Rule 3270 requires members to disclose outside business activities. Michael Shoniker broke this rule by not telling his firm about his work with MTS Consulting Co. He provided financial consulting services to third parties from 2018 to 2022.
Shoniker failed to get written approval for these activities.
Shoniker lied on yearly compliance forms. He said he didn’t offer financial advice to others during this time. This false statement went against FINRA’s rules. The rule aims to prevent conflicts of interest and protect investors.
Shoniker’s actions put his clients and firm at risk.
Violation of FINRA Rule 2010
FINRA Rule 2010 sets high standards for fair trade in the financial industry. Michael Shoniker broke this rule from July 2017 to February 2023. He failed to tell his firm about offering consulting and marketing services to an advisor.
This lack of disclosure went against the principles of honest business practices.
Shoniker’s actions also involved unapproved outside activities. These breaches led to disciplinary measures from FINRA. Shoniker accepted these penalties without admitting or denying the findings.
His case shows how FINRA enforces its rules to maintain trust in the financial sector.
Consequences and Penalties
FINRA hit Shoniker with a tough penalty. Want to know more about his suspension and fine? Keep reading to get the full story.
Suspension for six months
Michael Shoniker faces a six-month suspension from FINRA. This penalty starts on December 3, 2024. FINRA took this action because Shoniker failed to disclose outside business activities.
The suspension bars him from working in the securities industry for half a year.
The disciplinary action against Shoniker includes more than just the suspension. He also agreed to pay a fine as part of the settlement. This case shows how FINRA enforces rules about disclosing outside work.
It highlights the importance of being open about all business activities in the financial sector.
$7,500 fine
FINRA slapped Michael Shoniker with a $7,500 fine. This penalty came as part of his disciplinary action for breaking disclosure rules. The violations happened over a long period, from September 2016 to February 2023.
Shoniker agreed to pay the fine without admitting or denying FINRA’s findings.
The fine shows how serious FINRA takes rule violations. It serves as a warning to other financial professionals about the importance of following disclosure rules. Next, let’s look at Shoniker’s job status after these events.
Termination of Employment and New Registration
Shoniker’s job at Paychex ended, but he soon found a new role at Excel Wealth Management. Want to know more about his career moves? Keep reading!
Termination by Paychex
Paychex ended Michael Shoniker’s job in February 2023. This action came after FINRA started looking into Shoniker’s actions. The company filed a Form U5, which sparked FINRA’s probe.
This form is used to report when a registered person leaves their job.
Shoniker’s exit from Paychex was linked to the FINRA investigation. The probe focused on Shoniker’s conduct while working at the firm. FINRA’s inquiry led to serious consequences for Shoniker, including his job loss.
The termination marked a big change in Shoniker’s career path.
Registration with Excel Wealth Management
Michael Shoniker joined Excel Wealth Management in October 2023. This Charlotte-based firm became his new professional home after leaving Paychex. Shoniker’s time with Excel was brief, lasting only until November 2023.
His short stint at the North Carolina company marked a quick transition in his career path. The move to Excel Wealth Management came after Shoniker faced issues related to finder’s fees at his previous job.
Current employment status
Shoniker’s career path took a turn after his FINRA suspension. He no longer works in the financial industry. Instead, he now runs a spa franchise in Charlotte. This shift marks a big change from his previous roles in finance.
His move to a new field raises questions about his future in the financial world. The next section will explore the wider impact of FINRA’s actions on Shoniker’s career.
Conclusion
Michael Shoniker’s case shows the high cost of breaking FINRA rules. His actions led to a six-month ban and a $7,500 fine. This serves as a warning for other brokers about hidden deals and fee-sharing.
Brokers must always be open about their business ties. They should follow firm rules on outside work. The case also points out how firms check on their brokers. Yearly surveys help catch rule-breaking.
What steps can brokers take to stay within the rules? Being honest is key to a long career in finance.
FAQs
1. What led to Michael Shoniker’s FINRA fine and suspension?
FINRA penalized Michael Shoniker for accepting finder’s fees without proper disclosure or approval from his firm.
2. How much was the financial penalty imposed on Michael Shoniker?
The exact amount of the fine has not been disclosed, but FINRA typically imposes substantial penalties for such violations.
3. What is the duration of Michael Shoniker’s suspension?
The length of Shoniker’s suspension from the securities industry has not been specified in the available information.
4. Are finder’s fees always prohibited in the financial industry?
Finder’s fees are not always banned, but they must be properly disclosed and approved by the broker’s firm to comply with FINRA rules.
