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Regulation and Compliance > Federal Regulation > FINRA

FINRA Bars Ex-Merrill Rep Who Refused to Testify

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The Financial Industry Regulatory Authority barred an ex-Merrill Lynch broker who refused to give testimony during the regulator’s investigation into his alleged misuse of client funds and involvement in potential undisclosed outside business activity, according to FINRA.

Without admitting or denying the findings, Zachary Scott Wagner signed a FINRA letter of acceptance, waiver and consent in which he agreed to be barred from associating with any FINRA member in any capacity. He signed the letter Jan. 7 and FINRA accepted it Tuesday.

Wagner joined Merrill as a general securities representative in December 2017. However, his stay with the firm proved to be short-lived. On Oct. 5, 2018, Merrill filed a Form U5 reporting that Wagner had been terminated Sept. 7 for “failing to provide accurate information during the pre-hire process,” according to the FINRA letter.

He then joined OneAmerica Securities, but was discharged from that firm March 29, 2019, according to Wagner’s profile on FINRA’s BrokerCheck website.

The Arizona Securities Division had investigated him over what were believed to be “multiple violations of the Securities Act of Arizona and the Arizona Investment Management Act,” according to BrokerCheck. The rep was “accused of offering or selling securities within or from Arizona while not registered as a salesman and engaging in fraudulent activity by using a client’s funds for personal use rather than investing and providing material misrepresentations through false documents in regards to the client’s account,” it said.

Merrill declined to comment Wednesday. OneAmerica and David W. Williams, a lawyer at Davis Miles McGuire Gardner in Tempe, Arizona, who was representing Wagner in the case, didn’t immediately respond to requests for comment.

In October, Wagner went on to violate FINRA Rules 8210 and 2010 “by failing to provide testimony as requested pursuant to FINRA Rule 8210,” according to the FINRA letter.

FINRA had been investigating the rep’s “potential misuse of customer funds and involvement in an undisclosed outside business activity” and, on Sept. 17, 2019, FINRA staff sent a request to Wagner to appear for on-the-record testimony Oct. 8, FINRA said.

However, on Sept. 23, Wagner “informed FINRA staff through counsel that despite receiving the 8210 Request for Testimony,” he “would not appear and provide testimony at any time,” according to the FINRA letter, which went on to note he never did provide that testimony.


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