FINRA Investigates Spartan Capital Leader John Dennis Lowry for Compliance Failures

The Allegations Against Lowry and Monchik

FINRA’s complaint, filed in November 2024, centers on the firm’s repeated failure to timely respond to Rule 8210 requests — regulatory inquiries that require firms to produce information and documentation during investigations.

Timeline of the Compliance Failures

Between June 2021 and October 2023, Spartan Capital Securities and its leadership allegedly failed to meet deadlines for multiple information requests tied to:

• Private fund sales that involved both John Lowry and Kim Monchik through outside business activities.
• Net capital calculations required for regulatory reporting.
• Follow-up investigations stemming from incomplete or delayed responses.

FINRA’s complaint claims that the firm’s responses often came only after expedited proceedings were initiated, meaning FINRA had to apply additional regulatory pressure to compel compliance.

Key examples include:

• June–August 2021: Spartan Capital missed three major deadlines for document requests, resulting in an October 2021 suspension warning. Complete responses were delayed for nearly six months.
• May 2022: FINRA requested information on private funds, which Lowry did not fully address until September 2022, following two expedited proceedings.
• 2023: Additional delays occurred as the firm again failed to provide complete records, prompting more follow-ups.

FINRA also alleged that Lowry delegated compliance duties to Monchik without proper oversight, a move that violated FINRA Rules 3110 and 2010, which require firms to maintain effective supervisory systems.

Systemic Supervision Failures Within Spartan Capital

The complaint paints a picture of systemic oversight problems within Spartan Capital’s compliance department. As CEO, Lowry was allegedly responsible for ensuring timely and complete responses to FINRA but failed to track deadlines or enforce accountability among staff.

FINRA’s Findings Indicated:

• Understaffed compliance teams and inadequate training within Spartan’s compliance department.
• A lack of tracking systems for Rule 8210 requests, resulting in repeated missed deadlines.
• Delegation without verification, where Lowry and Monchik assigned responsibilities but failed to ensure follow-through.
• Red flags ignored, including multiple expedited proceedings initiated by FINRA that should have prompted corrective action.

These lapses, according to FINRA, hindered ongoing regulatory examinations into Spartan’s sales of unregistered private funds and the firm’s net capital compliance. FINRA maintains that Lowry and Monchik’s inaction and poor oversight directly contributed to the firm’s repeated regulatory violations.

If proven, these findings could result in suspensions, fines, and potential removal from leadership roles for both executives.

Investor Complaints Against John Dennis Lowry

Beyond the compliance investigation, Lowry has an extensive record of customer disputes and arbitration claims, many alleging unsuitable recommendations, excessive trading, and supervisory failures.

Past Settlements and Awards

• August 24, 2018: Investors were awarded $210,000 in a case alleging excessive trading, unsuitable recommendations, and fraud.
• August 12, 2021: A complaint for unsuitable investments and breach of fiduciary duty settled for $75,000.
• November 28, 2017: A failure-to-supervise claim settled for $60,000.
• In another matter, an award of $41,842 was issued for churning and unsuitable trading.

Pending Complaints and Damages (2022–2025)

Lowry currently faces five pending investor complaints, including:

• November 18, 2022: Failure to supervise, seeking $247,262 in damages.
• July 16, 2024: Failure to supervise, seeking $375,000.
• May 27, 2025: “Respondeat superior” complaint linked to private funds.
• June 9, 2025: Failure to supervise, seeking $200,000.
• March 13, 2025: Failure to supervise (damages pending).

In total, the pending claims exceed $1.5 million, showing the growing scrutiny surrounding Spartan Capital’s supervisory failures.

Consequences of Compliance and Supervision Failures

FINRA has asserted that Lowry’s and Monchik’s actions violated Rules 8210, 3110, and 2010, emphasizing that delegation does not absolve firm leaders of responsibility. If the allegations are upheld, possible outcomes include:

• Suspensions or bars from acting in supervisory or executive roles.
• Monetary penalties and repayment of investigative costs.
• Firm-level sanctions that could impact Spartan Capital’s operations and investor relations.

These failures have already damaged confidence among Spartan Capital’s clients, as consistent regulatory scrutiny often signals deeper operational issues.

For investors, these ongoing disputes may indicate potential firm-wide supervisory weaknesses — opening the door for legal claims to recover losses caused by unsuitable investments or mismanagement.