Todd Alan Shanholtzer, of Las Vegas, Nevada, a stockbroker formerly registered with Park Avenue Securities, LLC, has been fined $10,000.00 and suspended for six months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that he sold away from his firm, misused customer funds, and entered into an unauthorized loan arrangement with a firm customer. Letter of Acceptance, Waiver and Consent, No. 2014040688601 (Sept. 30, 2015).
According to the AWC, in September of 2012, Shanholtzer consulted with a customer, DJ, about the surrender of a customer’s variable annuity valued at $197,000.00, where a portion of the funds were utilized by the customer and the remainder was provided to Shanholtzer for reinvestment into a retirement account. Apparently, Shanholtzer placed the customer’s funds intended for a retirement account into a brokerage account that the customer and his spouse held. The customer evidently incurred a $58,622.00 distribution, triggering penalties as well as federal and state tax liabilities. Consequently, FINRA found that Shanholtzer’s conduct was violative of FINRA Rule 2010 and 2150(a).
The AWC further stated that the customer and his spouse eventually noticed the botched transaction, and complained about this and other transactions that led the customer to suffer from undue tax consequences. Shanholtzer reportedly attempted to settle the customer’s dispute away from his firm, where he instructed the customer to refrain from contacting Park Avenue Securities in reference to his wrongdoing. Shanholtzer ultimately failed to notify his firm about the customer’s dispute and his attempts at settling it outside the firm’s auspices. Consequently, FINRA found that Shanholtzer’s conduct was violative of FINRA Rule 2010.
Moreover, the AWC stated that an unauthorized loan was consummated by Shanholtzer in the amount of $40,000.00, where the funds were provided to a customer of the firm. As the firm prohibited this type of arrangement, FINRA found that Shanholtzer’s conduct was violative of FINRA Rules 2010 and 3240.
FINRA Public Disclosure additionally reveals that Shanholtzer has been identified in three customer initiated investment related disputes containing allegations of his misconduct while employed with MML Investors Services, Inc. and Park Avenue Securities LLC. Particularly, on March 28, 2013, a customer initiated investment related civil action involving Shanholtzer’s conduct was settled for $250,000.00 supported by allegations that Shanholtzer induced the customer’s whole life insurance policy purchase despite the insurance policy failing to be suitable for the customer.
Moreover, on December 30, 2014, a customer initiated investment related written complaint regarding Shanholtzer’s activities was resolved for $402,537.59 in damages grounded by allegations that Shanholtzer made unsuitable investment recommendations concerning variable annuities and whole life insurance policies.
Shanholtzer’s registration with Park Avenue Securities was terminated on March 14, 2014 based upon allegations that he attempted to resolve the customer’s complaint without the firm’s knowledge.
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