WealthManagement Magazine

Fess Up: The Firm Will Find Out Anyway

People applying for work on Wall Street can be denied for many reasons these days, but there are two very common ways they get tripped up. First, some try to hide their criminal past as if their Social Security numbers, CRD numbers, fingerprints and other cross-referencing data were not eventually going to lead to the truth. Second, some believe they have been cleared or that their offenses do not

People applying for work on Wall Street can be denied for many reasons these days, but there are two very common ways they get tripped up.

First, some try to hide their criminal past — as if their Social Security numbers, CRD numbers, fingerprints and other cross-referencing data were not eventually going to lead to the truth. Second, some believe they have been cleared or that their offenses do not need to be reported.

In each case, the applicants tend to find out the hard way that the securities industry is extra keen on keeping it clean when it comes to new hires. Here is a sampling of recent New York Stock Exchange cases that demonstrate this point.

Sticky Fingerprints

Jing Wang was arrested on Jan. 21, 1993, for a hit-and-run with resulting property damage (a violation). He received probation and a suspended sentence. He was again arrested in March 1996, for shoplifting and theft of personal property (misdemeanors), and in April 1996 was sentenced to 180 days in jail (suspended) with two years summary probation.

On Feb. 24, 2003, Wang completed a Credit Suisse First Boston employment application on which he denied he had ever been convicted or had pleaded guilty to a criminal charge. He was hired as a nonregistered employee, but the firm terminated him a few months later after learning of his nondisclosure (his fingerprints were flagged by the U.S. Dept. of Justice). Following a default hearing, the NYSE imposed a censure and five-year bar.

Insufficient Funds and Disclosure

On Jan. 16, 1998, Rizalina Dones Flores was arrested for purchasing merchandise with a payment-stopped personal check. She plead guilty and was convicted in Alexandria, Va., of false pretenses (a misdemeanor). She was sentenced to six months in jail and ordered to pay restitution of $111.61. The conviction rendered Flores statutorily disqualified from employment in the securities industry until March 2008.

In September 2001, she was charged with writing a bad check (the charges were later dropped), and in 2002, she was charged in Maryland with theft under $500 (a misdemeanor). The latter netted her probation before judgment, along with the stipulation that she pay $195 in restitution and serve two months probation.

In October 2003, Flores applied for a job at A.G. Edwards and was hired as an unregistered financial assistant. The firm, upon learning of her past, terminated her in December 2003. Following a default hearing, the NYSE imposed a censure and a six-year bar.

Impaired Memory?

In June 2001, Nicholas Michael Clements was arrested and charged in Phoenix, Ariz., with two misdemeanor counts of driving under the influence and failing to produce proof of financial responsibility. He plead guilty to the DUIs. A few days after his guilty plea to the DUIs (in October 2001), Clements again found himself charged with two DUIs, but on Feb. 28, 2002, those misdemeanors were elevated to felonies. He was convicted in August 2003, and, accordingly, deemed statutorily disqualified from employment in the securities industry until August 2013.

When Clements applied for securities industry employment in June 2003, he denied having been charged or convicted of a felony or misdemeanor. In July 2003, he began employment with Morgan Stanley, and submitted a form U4 on which he denied having been charged with any felony. Following a default hearing, the NYSE imposed a censure and a 12-year bar.

In the great tradition of convicted people, these aspiring securities industry workers all were able to convince themselves that justice had not actually been served in their particular cases. Or maybe they believed the extenuating circumstances of their specific situations would render them somehow, magically, employable. Whatever the case, it's abundantly clear that ours is an industry in which past misdeeds will eventually catch up to us all, and conducting ourselves accordingly is one of the best favors any of us could give to our careers.

Writer's BIO: Bill Singer is a practicing regulatory lawyer and the publisher of RRBDLAW.com

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