Michael Timothy Shoniker a stockbroker based in Charlotte, North Carolina, who was registered with Paychex Securities Corporation, was the subject of a regulatory action by Financial Industry Regulatory Authority (FINRA) for the alleged violation of FINRA Rules 3270 and 2010for the failure to disclose an outside business activity (OBA) and the receipt of approximately $740,000.00 in compensation for consulting and referrals provided to a third-party investment advisor. This regulatory action by FINRA, resulted in sanctions including a six-month suspension and a monetary fine. AWC No. 2023078093901.
Shoniker reportedly formed a limited liability company (LLC) in September 2016 for real estate investments but failed to disclose this activity to Paychex until January 2017. Soon after disclosure, Shoniker used the LLC to provide consulting and marketing services to a third-party investment advisor. From July 2017 to February 2023, Shoniker referred customers of Paychex to this advisor in exchange for a share of the advisory fees, ultimately receiving half of the fees from over 96 clients. Shoniker’s actions were reportedly not disclosed to Paychex as required under firm policies, which prohibited such activities without prior written approval.
Additionally, Shoniker submitted inaccurate OBA forms and annual compliance questionnaires between 2018 and 2022. These forms described the LLC as a real estate business without mentioning the referral and consulting services conducted for the third-party investment advisor. Shoniker also falsely certified that no undisclosed financial consulting services or outside business activities were being performed, as alleged in FINRA’s findings.
As a resolution, Shoniker consented to the sanctions outlined in the Letter of Acceptance, Waiver, and Consent (AWC), which included a suspension from associating with any FINRA member starting December 2, 2024, and a fine of $7,500.
Shoniker’s employment history includes Paychex Securities Corporation from September 2015 to February 2023 and ADP Broker-Dealer Inc. from October 2014 to January 2015.
