Michael Molinaro Suspended by FINRA for Third Time

Michael Molinaro (CRD #: 2358346), a broker registered with Network 1 Financial Securities, is the subject of a FINRA suspension. This disclosure appears on his BrokerCheck record, accessed on May 18, 2025. Keep reading if you have questions about his alleged conduct. 

2025 FINRA Suspension

On March 4, 2025, Michael Molinaro and Network 1 Financial Securities consented to the entry of findings that they allegedly failed to implement an anti-money laundering (AML) program reasonably designed to comply with the requirements of the Bank Secrecy Act and its implementing regulations.

According to a Letter of Acceptance, Waiver & Consent (AWC), the firm allegedly served as an underwriter for initial public offerings (IPOs) and up-listings for small-cap issuers. Between January 2021 and August 2022, the firm allegedly received more than $5 million in compensation in connection with its role as underwriter for five China-based IPOs.

During this period, Michael Molinaro was allegedly responsible for the firm’s Customer Identification Program (CIP). The CIP he implemented allegedly failed to reasonably verify the identity of hundreds of China-based investors, sourced by the issuers, who acquired shares in these IPOs.

Further, Network 1 Financial Securities’ AML compliance program allegedly failed to address how the firm would detect, investigate, or report signs of money laundering, or how to conduct ongoing customer due diligence. These deficiencies allegedly caused the firm to fail to identify or reasonably address red flags.

Alleged Failure to Supervise

The AWC alleged that, between October 2019 and October 2022, Network 1 Financial Securities failed to establish and enforce a system of supervision reasonably designed to review and preserve the electronic communications of its brokers.

This allegedly included off-channel communications such as those sent via third-party applications, and the firm allegedly did not take steps to determine if brokers used unapproved channels for business communications.

Network 1 Financial Securities allegedly failed to review or preserve at least hundreds of business communications sent by its representatives using unapproved platforms, including messages concerning private investments in public equity (PIPE) transactions, financial advice about investments in IPOs, and requests to transfer shares away from the firm.

The AWC concluded that these allegations constituted violations of FINRA Rules 3310(a), 3310(f), and 2010 on the part of Michael Molinaro and Network 1 Financial Securities. The AWC further alleged that the firm violated FINRA Rule 4511 and Securities Exchange Act of 1934 Section 17(a) and Rule 17a-4 thereunder.

FINRA Rule 3110

FINRA Rule 3110 requires that firms establish systems of supervision to maintain their compliance with securities regulations. Firms must appoint supervisors and provide them with Written Supervisory Procedures (WSPs) to follow.

FINRA Rule 2010

FINRA Rule 2010 holds brokers to high standards of commercial honor and just and equitable principles of trade.

FINRA Rule 4511

FINRA Rule 4511 requires firms to maintain accurate books and records.

Securities Exchange Act of 1934

Section 17(a) of the Securities Exchange Act of 1934 defines the recordkeeping requirements for brokerage firms and other organizations.

Rule 17a-4 describes how firms should preserve records, how long these records should be kept, and other requirements for record-keeping systems.

Sanctions

Michael Molinaro consented to a three-month suspension from associating with FINRA members in all principal capacities and as an anti-money laundering compliance officer (AMLCO). His suspension began on April 7, 2025, and will end on July 6, 2025.

Network 1 Financial Securities consented to the following sanctions:

• Censure
• $400,000 fine
• Undertaking to retain an independent consultant to remediate the issues alleged in the AWC

You can read the full AWC here.

2023 FINRA Suspension

On August 31, 2023, Michael Molinaro and Network 1 consented to the entry of findings that they allegedly did not enforce written supervisory procedures (WSPs) reasonably designed to achieve compliance with FINRA Rule 2111 as it pertains to excessive trading. 

According to the AWC, the firm’s WSPs allegedly did not identify what cost-to-equity ratio or turnover rate would suggest excessive trading. They allegedly also did not provide reasonable guidance about what steps to take after identifying an excessively traded account. 

The firm and Michael Molinaro allegedly did not identify and respond to red flags of excessive trading. Michael Molinaro allegedly served as the firm’s designated principal responsible for determining the firm’s response to signs of excessive trading starting in July 2017.

However, the AWC alleged that he failed to direct the firm to take reasonable steps to address excessive trading, such as restricting the commissions that representatives could charge accounts, until 2019. Further, some representatives allegedly continued charging high commissions even after the firm became aware of excessive trading.

Michael Molinaro and Network 1 Financial Securities allegedly failed to identify excessive trading in eight client accounts, which allegedly resulted in cost-to-equity ratios exceeding 20% and caused the clients to pay more than $533,500 in commissions and trading costs.

The AWC concluded that these allegations constituted violations of FINRA Rules 3110 and 2010 on the part of Michael Molinaro. FINRA further alleged that Network 1 Financial Securities violated FINRA Rules 2111, 3110, and 2010 and the Care and Compliance Obligations of Regulation Best Interest.

Excessive Trading

FINRA Rule 2111, a.k.a. The Suitability Rule, requires brokers to tailor their investment recommendations to suit investors’ needs. Trades must be quantitatively suitable, meaning the number of trades must suit an investor’s needs. Each trade comes with a transaction fee, so too many transactions will result in excessive fees for the investor. Excessive trading is also known as “churning.” 

Regulation Best Interest

Regulation Best Interest (Reg-BI) is an SEC regulation that requires brokerage firms to put their clients’ best interests first. For example, firms must conduct reasonable due diligence when researching investments to ensure their recommendations are suitable for the investor.

Sanctions

Michael Molinaro consented to the following sanctions:

• Three-month suspension from associating with FINRA members in a principal capacity
• $5,000 fine

His suspension ran from September 18 to December 17, 2023.

Network 1 Financial Securities consented to the following sanctions:

• Censure
• $200,000 fine
• Restitution of $533,587 plus interest
• Undertaking to remediate the issues alleged in the AWC

You can read a copy of the AWC here. 

Tax Lien

On November 21, 2017, Michael Molinaro incurred a $56,137.63 tax lien.

Investor Dispute

On August 26, 2015, an investor named Michael Molinaro in allegations of failure to supervise. The client sought $130,628.37 in damages. According to Michael Molinaro’s detailed BrokerCheck report, this dispute has been stayed by a bankruptcy filing.

Bankruptcy

On August 28, 2015, Michael Molinaro discharged a bankruptcy.

2015 FINRA Suspension

On January 13, 2015, Michael Molinaro consented to the entry of findings that he allegedly failed to reasonably enforce the supervisory system of Charles Vista with regard to private placements and violated the interim membership restrictions ordered by FINRA.

According to the AWC, Michael Molinaro allegedly served as Charles Vista’s President and Chief Compliance Officer during the relevant period of at least September 2009 through April 10, 2010.

During this time, Michael Molinaro allegedly delegated the supervision of the firm’s investment banking business and private placement activities to an individual who was not properly qualified as a registered principal. He allegedly failed to reasonably monitor the effectiveness of this individual.

Michael Molinaro was allegedly also responsible for delegating and registering branch offices. On April 22, 2009, FINRA informed him of its imposition of interim membership restrictions on the firm, including limiting it to one office. However, on July 7, 2010, Michael Molinaro allowed Charles Vista to open an additional branch office.

The AWC concluded that these allegations constituted violations of NASD Rules 3010 and 1017, and FINRA Rule 2010.

Sanctions

Michael Molinaro consented to a 45-calendar-day suspension from associating with FINRA members in a principal capacity.

His suspension ran from February 2 to March 18, 2015. You can read the AWC here.

Background Information 

Michael Molinaro has passed the following exams: 

• Series 65 Uniform Investment Adviser Law Examination 
• Series 63 Uniform Securities Agent State Law Examination 
• Series 79TO Investment Banking Registered Representative Examination 
• Series 99TO Operations Professional Examination 
• Series 52TO Municipal Securities Representative Examination 
• SIE – Securities Industry Essentials Examination 
• Series 7 General Securities Representative Examination 
• Series 14 Compliance Officer Examination 
• Series 4 Registered Options Principal Examination 
• Series 53 Municipal Securities Principal Examination 
• Series 10 General Securities Sales Supervisor – General Module Examination 
• Series 9 General Securities Sales Supervisor – Options Module Examination 
• Series 24 General Securities Principal Examination 

He is a registered broker in Florida and New York. 

Michael Molinaro has registered with the following firms: 

• Network 1 Financial Securities (CRD #: 13577) 
• Columbus Advisory Group (CRD #: 126331) 
• EJ Sterling (CRD #: 16569) 
• Charles Vista (CRD #: 132650) 
• John Thomas Financial (CRD #: 40982) 
• Charles Vista (CRD #: 132650) 
• Maxim Group (CRD #: 120708) 
• S.W. Bach & Company (CRD #: 43522) 
• Ladenburg Thalmann & Co. (CRD #: 505) 
• Ladenburg Capital Management (CRD #: 14623) 
• GKN Securities Corp. (CRD #: 19415) 

Kurta Law Can Help

If you worked with Michael Molinaro and have concerns about your investments, please contact us today at 877-600-0098 or info@kurtalawfirm.com for a free consultation.

For over 20 years, Kurta Law has advocated on behalf of investors who want to recover their investment losses from brokers and brokerage firms. Kurta Law is a nationally recognized law firm that exclusively represents investors against brokers and brokerage firms on a contingency basis. This means that the firm only earns a fee if our securities attorneys recover money on your behalf.