FINRA

Without admitting or denying the findings, Shanholtzer consented to the sanctions and to the entry of findings that he mishandled funds from a brokerage customer by mistakenly directing $58,622 of the customer's funds into the wrong account, which caused the customer to incur a significant tax liability. Shanholtzer failed to deposit the funds into a qualified tax-deferred account, as instructed by the customer and the customer's wife, and instead the funds were mistakenly deposited into the customer's and his wife's joint brokerage account. As a result, the $58,622 was deemed a taxable distribution and an early withdrawal subject to state and federal tax. The findings stated that when the customer complained to Shanholtzer about this error and other prior transactions, Shanholtzer settled the complaint away from his member firm by making a total of $50,000 in payments directly to the customer. Shanholtzer also asked the customer and his wife not to mention their complaints to anyone, including the firm, and to not use the word "mistake" in any written communications to him. Shanholtzer did not inform his firm of the customer's complaints or of the payments to the customer. The findings also stated that Shanholtzer provided a $40,000 personal cash loan to a corporate brokerage customer of the firm and Shanholtzer without notifying or receiving approval from his firm. The firm's written policies prohibited Shanholtzer from engaging in this lending arrangement.

Acceptance, Waiver & Consent(AWC)

Civil and Administrative Penalty(ies)/Fine(s)

$10,000.00

Suspension

any capacity

six months

10/5/2015

4/4/2016