brokerwatch

Former PFS Investments Broker Suspended by FINRA

On November 28, 2023, FINRA issued a suspension after determining that Fruge engaged in outside business activities without providing written notice to his employer, PFS. Fruge allegedly operated a company that offered e-commerce and lead generation services. Notably, his outside business dealings reportedly involved other PFS representatives and firm clients.

Fruge disclosed only a portion of the business— the e-commerce storefront—but allegedly failed to disclose a second key component involving digital real estate. PFS raised internal concerns once it discovered that Fruge was marketing his business to other registered representatives. The firm directed him to cease these activities and to identify any firm clients who had purchased services through his company. Fruge allegedly failed to comply with these requests.

Despite direct instructions from PFS Investments to halt all marketing and sales activities, Fruge continued promoting the business. According to FINRA, he ultimately chose to pursue histhe outside venture over his affiliation with PFS.

Terms of the FINRA Action Against Fruge

As part of an Acceptance, Waiver, and Consent (AWC) agreement, Jake Fruge consented to the following penalties without admitting or denying the allegations:

• A 24-month suspension from associating with any FINRA member in any capacity
• A $10,000 fine

Fruge was found to have violated FINRA Rule 3270, which requires brokers to fully disclose and receive written approval for any outside business activities, especially those that may result in compensation.

Fruge’s Outside Business Ventures

Brokerage Firms Have a Duty to Supervise their Registered Investment Advisory Business

Concerned About Investments with Jake Fruge?