Steven A. Bumbera, of Saint Louis, Missouri, a stockbroker formerly registered with Kovack Securities Inc., has been fined $4,000.00 and suspended from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity by consenting to findings that he engaged in an unapproved outside business activity and failed to be forthcoming to the firm when questioned about it. Letter of Acceptance, Waiver and Consent, No. 2016050361601 (Dec. 12, 2017).
According to the AWC, between April of 2011 and December of 2013, as many as forty-five individuals, six of whom were customers of LPL Financial, had been referred by Bumbera to a mortgage broker through an outside business activity. Evidently, Bumbera earned compensation in connection with his activities with two referrals.
The AWC stated that Bumbera apprised LPL Financial about the outside business activities, but those activities were never approved by the firm. Evidently, in three compliance questionnaires administered to Bumbera by the firm between December of 2011 and December of 2013, Bumbera confirmed that he had not engaged in any outside business activities, including those relating to mortgage based services. Further, Bumbera reportedly attested to not having been involved with referral agreements for compensation.
The AWC indicated that Bumbera prevented the firm from determining the extent by which his outside activities should be conditioned, limited or otherwise prohibited. The AWC revealed that those activities were discovered in March of 2016 during which time LPL inspected Bumbera’s 1099 tax documentation. FINRA found that Bumbera’s engagement in an unapproved outside business activity was violative of FINRA Rules 2010 and 3270. FINRA also concluded that his failure to be forthcoming in the compliance questionnaires was violative of FINRA Rule 2010.
FINRA Public Disclosure reveals that on March 9, 2010, a customer filed an investment related written complaint involving Bumbera’s conduct, in which the customer requested $42,000.00 in damages based upon allegations that Bumbera inappropriately recommended that the customer exchange fixed income investments and fixed annuities with a variable annuity issued by MetLife.
Additionally, the customer alleged that Bumbera effected sales of the customer’s corporate bond positions to buy utility bonds, with those interest payments on the utility bonds having been inappropriately invested in Van Kampen Funds.
Bumbera was fired from LPL Financial LLC on June 10, 2016, supported by allegations that he violated the firm’s policies by engaging in an outside business activity. From June 29, 2016 to June 2, 2017, he was registered with Kovack Securities Inc.
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