Mt. Vernon, Ohio – December 6, 2025 – Stephen Michael Franko (CRD# 2157707), a broker registered with Independence Capital Co., Inc. in Mt. Vernon, Ohio, has been sanctioned by FINRA for willfully violating Regulation Best Interest by recommending unsuitable corporate bonds to elderly retail customers. This article provides information about the regulatory action against Mr. Franko and explains options available to investors who may have experienced similar losses through FINRA arbitration.
BrokerCheck Snapshot
Name: Steve Franko
CRD #: 2157707
Firm: Independence Capital Co., Inc.
Location: Mt. Vernon, Ohio
Years in Industry: 34
Number of Disclosures: 1
Regulatory Action Against Stephen Michael Franko
FINRA Sanction – Final (November 2025)
Date Initiated: November 17, 2025
Regulatory Authority: FINRA
Docket Number: 2022074289901
Product Type: Debt-Corporate (Speculative Bonds)
Status: Final – Acceptance, Waiver & Consent (AWC)
Resolution Date: November 17, 2025
Sanctions Ordered:
- Three-month suspension (December 15, 2025 – March 14, 2026)
- $5,000 fine
- $5,640 restitution plus interest
Findings:
Without admitting or denying the findings, Mr. Franko consented to the sanctions and to the entry of findings that he willfully violated Rule 15l-1(a)(1) under the Securities Exchange Act of 1934 (Regulation Best Interest) by recommending that customers invest in speculative and unrated corporate bonds that were not in the customers’ best interests.
The findings stated that Mr. Franko made recommendations totaling $195,000 to three elderly retail customers with investment objectives of income that did not include speculation, all of whom made the recommended investment. Mr. Franko earned $5,640 in commission in connection with his recommendations and allegedly did not exercise reasonable diligence, care, and skill to, among other things, have a reasonable basis to believe that the recommendations were in their best interest based on their investment profiles and the potential risks, rewards, and costs associated with the recommendations.
Pattern of Complaints / Risk Factors
While each case is unique, regulatory actions involving unsuitable investments recommended to elderly investors may indicate concerns related to inadequate risk disclosures, failure to consider customer investment profiles, and potential violations of Regulation Best Interest. The case specifically involved speculative, unrated corporate bonds recommended to customers with conservative income objectives. Investors should carefully review account statements and seek legal guidance if similar issues occurred.
Can Investors Recover Losses?
Investors who were recommended unsuitable or high-risk investments may be entitled to recover losses through FINRA arbitration. While one customer in this case received restitution of their principal amount from the firm, other affected investors may still have claims for losses resulting from unsuitable investment recommendations.
Patil Law, P.C. has over 15 years of experience representing investors in FINRA arbitration and securities litigation, with more than $25 million recovered for clients across 1,000+ cases. We provide a free, confidential consultation to review your potential claim. Our firm works on a contingency fee basis, meaning you pay no attorney fees unless we successfully recover money for you.
About FINRA Arbitration
FINRA arbitration is a streamlined dispute resolution process for securities-related claims. It offers a faster, more cost-effective alternative to traditional court litigation. Most cases are resolved within 12-16 months. Claims generally must be filed within six years of the incident.
Related Brokers and Firms
Investors concerned about potential broker misconduct at Independence Capital Co., Inc. may wish to review our firm hub page: Independence Capital Advisors – Complaints & Disclosures.
Additional resources about investment losses:
Frequently Asked Questions
Q1: What is the complaint against Stephen Michael Franko?
Stephen Michael Franko was sanctioned by FINRA in November 2025 for willfully violating Regulation Best Interest. The findings stated he recommended speculative and unrated corporate bonds totaling $195,000 to three elderly retail customers whose investment objectives did not include speculation. He received a three-month suspension, a $5,000fine, and must pay $5,640 in restitution.
Q2: Can investors recover losses involving Independence Capital Co., Inc.?
Yes. Investors who have suffered losses due to broker misconduct at Independence Capital Co., Inc. may be entitled to recover damages through FINRA arbitration. Most brokerage agreements require disputes to be resolved through this process rather than in court.
Q3: What is FINRA arbitration?
FINRA arbitration is a dispute resolution forum where investors can file claims against brokers and brokerage firms for securities law violations. The process is overseen by the Financial Industry Regulatory Authority and typically resolves cases more quickly than traditional litigation.
Q4: What does “unsuitable investment” mean?
An unsuitable investment is one that does not align with an investor’s financial situation, risk tolerance, investment objectives, or investment experience. Brokers have a legal obligation to recommend only investments that are suitable for their clients based on these factors. Under Regulation Best Interest, brokers must act in the customer’s best interest when making recommendations.
Q5: How do I look up a broker on BrokerCheck?
Visit FINRA’s BrokerCheck website at brokercheck.finra.org. Enter the broker’s name or CRD number to view their registration history, qualifications, and any disclosed complaints, arbitrations, or regulatory actions.
Q6: What should I do if I suspect broker misconduct?
If you suspect misconduct, gather all account statements, trade confirmations, and communications with your broker. Consider filing a complaint with FINRA and consult with a securities attorney to evaluate whether you have grounds for an arbitration claim. Act promptly, as claims must generally be filed within six years.
About Patil Law, P.C.
Patil Law, P.C. is a securities litigation firm dedicated to representing investors who have suffered losses due to broker misconduct, unsuitable recommendations, and securities fraud. Founded in 2018 by attorney Chetan Patil, the firm focuses exclusively on FINRA arbitration and investment loss recovery.
With over 15 years of combined experience in securities law, Patil Law has successfully recovered more than $25 million for clients across 1,000+ cases. Attorney Chetan Patil earned his law degree from Case Western Reserve University School of Law. Attorneys Gabriela Dubrocq and Patricia Herrera earned their law degrees from University of Miami. The firm handles cases nationwide involving unauthorized trading, churning, unsuitable investments, breach of fiduciary duty, and failure to supervise.
Patil Law works on a contingency fee basis, meaning clients pay no attorney fees unless the firm successfully recovers money on their behalf. All consultations are free and confidential.
Contact Patil Law, P.C. for a Free Consultation
If you have experienced investment losses with Stephen Michael Franko or Independence Capital Co., Inc., we invite you to contact our experienced securities law team for a free, no-obligation case evaluation. Call us at 800-950-6553 or email info@patillaw.com to discuss your potential claim.
Disclaimer:
The information in this post is based on FINRA BrokerCheck records and public filings. Allegations described are pending or unproven and may be contested. All investors are entitled to fair treatment under securities laws. This is attorney advertising. Prior results do not guarantee a similar outcome. This communication is for informational purposes only and does not create an attorney-client relationship.
