John Dennis Lowry, of New York, New York, a stockbroker regulated by FINRA and the CEO of Spartan Capital Securities LLC, is accused by FINRA of failing to comply in a regulatory investigation. Department of Enforcement v. John Lowry et al. (Disciplinary Proceeding No. 2022075597101 (November 8, 2024).
The proceeding arose from allegations that Lowry and Spartan Capital Securities failed to comply with FINRA Rule 8210, which mandates timely responses to regulatory information requests. FINRA alleged that Lowry and Spartan Capital Securities repeatedly failed to provide requested information and documents, leading to delays in regulatory investigations. Lowry was also alleged to have failed to supervise the firm’s compliance with FINRA Rule 8210, delegating responsibilities without adequate oversight, which contributed to these delays.
Between June 2021 and October 2023, FINRA reportedly issued multiple requests to Spartan Capital Securities and Lowry for information and documents concerning private funds, which were an outside business activity of Lowry and Spartan’s Chief Administrative Officer (CAO), Kim Monchik. These requests also sought details about Spartan’s net capital calculations. Despite receiving these requests, the firm and its representatives supposedly failed to respond on time or provided incomplete responses, compelling FINRA to issue follow-up requests and initiate expedited proceedings to compel compliance. Notably, the securities broker dealer and its representatives completed their responses only after the initiation of these proceedings.
According to the Complaint, key incidents include the failure to respond to requests dated June 3, 2021, June 25, 2021, and August 23, 2021. Spartan Capital Securities failed to provide complete responses to these requests by the stipulated deadlines, resulting in an October 4, 2021 notice from FINRA warning of suspension. Spartan submitted incomplete responses even after extensions were granted. A complete response was provided in December 2021, nearly six months after the initial request and just weeks before a scheduled hearing. Similar delays occurred in response to requests made in 2022 and 2023. For example, a request issued to Lowry on May 6, 2022, for documents relating to the private funds was apparently not fully addressed until September 2022, following two expedited proceedings initiated due to non-compliance.
The allegations extend beyond delayed responses to include inadequate supervisory practices. As CEO, Lowry purportedly delegated responsibility for handling Rule 8210 requests to Monchik but failed to ensure she adequately performed these duties. FINRA asserted that Spartan Capital Securities lacked an effective system for tracking deadlines, collecting information, and submitting timely responses. These deficiencies were exacerbated by understaffing and inadequate training within the compliance department. Despite being aware of multiple expedited proceedings initiated against Spartan and himself, Lowry was alleged to have failed to investigate or address these systemic issues, nor did he implement corrective measures to ensure compliance.
FINRA also claimed that there were delays that hindered its ongoing investigations and examinations, including those related to the firm’s private funds and net capital calculations.
FINRA further alleged that Lowry’s failure to supervise compliance with Rule 8210 requests constituted a violation of FINRA Rules 3110 and 2010. Rule 3110 requires firms to establish and maintain a supervisory system reasonably designed to achieve compliance with applicable laws and regulations. Despite delegating supervisory responsibilities to Monchik, Lowry allegedly retained the ultimate responsibility to ensure these duties were carried out effectively. FINRA asserted that Lowry failed to act on red flags, including the repeated non-compliance with regulatory requests and the initiation of multiple expedited proceedings. According to FINRA, this lack of oversight directly contributed to the firm’s inability to meet its regulatory obligations.
The disciplinary proceeding also focused on Lowry’s alleged failure to intervene and take corrective action when it became apparent that the firm was not meeting its compliance obligations. FINRA claimed that despite being aware of ongoing issues, Lowry allegedly did not increase his supervision, provide additional resources, or ensure that someone else addressed the deficiencies.
As a result of these allegations, FINRA sought sanctions that include monetary penalties, potential suspension, and an order requiring Lowry to bear the costs of the disciplinary proceeding. The matter remains pending, with Lowry and Monchik denying the allegations and indicating their intent to contest the charges in a hearing.
According to FINRA Public Disclosure, Lowry has also been named in multiple customer disputes. Specifically, a complaint filed on August 12, 2021, involving allegations of unsuitable investments and breach of fiduciary duty resulted in a settlement of $75,000. Another, from November 28, 2017, alleging failure to supervise, was settled for $60,000.
On August 24, 2018, customers were awarded $210,00 and Lowry was found jointly and severally liable for damages relating to allegations of excessive trading, unsuitable recommendations, and fraud. FINRA Arbitration No. 16-03605. Similarly, in another FINRA Arbitration matter, Arbitration No. 15-01911), an award of $41,842 was issued against Lowrey for churning and unsuitable or excessive trading.
As of 2024, three customer disputes are pending, with alleged damages ranging from $247,262 to $1,590,434. Allegations include unsuitable recommendations, unauthorized trading, and failure to supervise. Lowry has denied all allegations, asserting that he was named solely due to his executive position at Spartan Capital Securities and had no direct involvement in the transactions or accounts in question.
Lowry has been associated with three firms since entering the securities industry in 2001. He has been registered with Spartan Capital Securities LLC since July 2008, serving as the firm’s CEO since 2014 and as a General Securities Principal and Investment Banking Principal, among other roles.
