RRBDlaw.com : October FINRA cases now analyzed by Bill Singer and online

Oct 22, 2010 12:41 pm




Regulatory lawyer Bill Singer has analyzed and posted the latest crop of FINRA disciplinary cases

One enterprisng broker borrowed over $30,000 from firm customers pursuant to a signed promissory note -- unfortunately, the member firm did not permit such borrowing and the broker failed to seek or obtain his firm's permission.  As these tales often go, the lending customers wound up having to go to court to sue for repayment.  They won.  However, the broker didn't have the bucks to repay. 
READ HERE at http://www.rrbdlaw.com/enforcement-actions/index.php?cid=1#2008014828301

This one starts off with the payment of $102,635 in supposed insurance premium payments  by customers to their insurance companies. Alas, the payment got a tad derailed. The broker deposited the funds into his personal account and used the money for his personal activities.  If you just went by the usual odds, well, this might have been an easy hundred thou or so in the broker's pocket.  Funny thing 'bout odds, thgou. A hurricane struck Texas and the broker's customers filed insurance claims and discovered they were not entitled to coverage.
READ HERE at  http://www.rrbdlaw.com/enforcement-actions/index.php?cid=1#2008015003201

Sometimes you read a disciplinary case, scratch your head, maybe scratch something else, and simply shrug -- what the hell were they thinking, you ultimately ask yourself.  In this puzzler, the FINRA member firm allowed its registered representatives to use email to conduct business but the firm did not have an automated system for email surveillance or archiving. How did the firm intend to monitor business-related email, as is required by industry rules and regulation?  Okay, sit down for this on -- the firm relied upon its registered representatives to electronically forward their emails to a dedicated internal email address for purposes of supervisory review by a principal and archiving. Yup, you got it, the old honor system.  I'm guessing you can sort of guess as to the regulator's reaction to that surveillance system.
READ HERE at  http://www.rrbdlaw.com/enforcement-actions/index.php?cid=1#2008015341602

Here's a simple set of allegations: A supervisor is charged with permitting $1,254,239.00 in excessive markups and markdowns.  I figure that got your attention, right?
READ HERE at http://www.rrbdlaw.com/enforcement-actions/index.php?cid=1#2005003644601

Did you hear the one about the Associated Person who misappropriated $33,445.82 from her supervisor’s personal checking account for her own personal use. The thief wrote checks to herself as reimbursement for expenses her office never actually incurred. She misappropriated approximately $2,000 in cash a third party made to her supervisor.
READ HERE at http://www.rrbdlaw.com/enforcement-actions/index.php?cid=1#2009018407601

One enterprising individual misappropriated member firm funds by using expense reimbursements for personal expenses, charging personal expenses to her corporate credit card and failing to pay the bills on the card. The employee's firm had previously sent her a memorandum about deficient and late payments on her corporate credit card, reminding her that she had agreed to use the card only for corporate expenses and to pay the balance in full each month. 
READ HERE at http://www.rrbdlaw.com/enforcement-actions/index.php?cid=1#2008015708701

How about this lovely gent?  He stole $1,000 from an elderly customer by using an automatic teller machine (ATM) card to withdraw the funds from the customer’s account without her knowledge or consent.
READ HERE at http://www.rrbdlaw.com/enforcement-actions/index.php?cid=1#2008015139801

Talk about getting off on the wrong foot!  This broker completed an employment application with a member firm in which he falsely represented his annual compensation at a previous securities firm and falsely represented the customer assets he managed and the revenues generated. He provided the firm with numerous fictitious documents supporting his claims and, based upon his false representations, he obtained an upfront loan of $780,000 from the firm. Yeah, you guessed it, the firm found out.
READ HERE at http://www.rrbdlaw.com/enforcement-actions/index.php?cid=1#2010022904801