An irreverent Wall Street Blog
by Bill Singer
Join BrokeAndBroker blog on Facebook  Follow the BrokeAndBroker blog on Twitter  Connect with BrokeAndBroker on LinkedIn  Join Bill Singer on Google+  Subscribe to RSS Feed

Wall Street's Women Set Up For Regulatory Failure
Written: July 25, 2012

For the purpose of proposing a settlement of rule violations alleged by the Financial Industry Regulatory Authority (“FINRA”), without admitting or denying the findings, prior to a regulatory hearing, and without an adjudication of any issue, Donna Katherine Monk submitted a Letter of Acceptance, Waiver and Consent (“AWC”), which FINRA accepted. In the Matter of Donna Katherine Monk, Respondent (AWC 20100213555, July 16, 2012).


Monk entered the securities industry in 1994, when she became employed as a client associate at Merrill, Lynch, Pierce, Fenner & Smith Incorporated; and, thereafter, in 1996, she became registered as a General Securities Representative at Merrill, where she remained until her resignation in July 2002.  Subsequently, she became a registered Independent Contractor with Raymond James & Associates until she was terminated on January 11, 2010. On February 25, 2010, Monk became re-employed at Merrill, where she is a registered associate.  The AWC asserts that Monk had no prior disciplinary history.

The New Team

In July 2002, Monk joined with two former Merrill brokers who are identified in the AWC as “JMR” and “RRJ,”and, in conjunction, the three acted as Raymond James’ Independent Contractors from their own three-person branch office in Charleston, WV. With Raymond James’ consent, JMR and RRJ formed a limited liability company of which they were the only two LLC members with Monk as the sole employee.

Monk primarily functioned as the office administrator while JMR (the branch office manager) and RRJ were responsible for developing securities business. Generally, Monk answered telephones, handled correspondence, and other customer service duties.  Also, Monk served as registered representative for a limited number of her family’s Raymond James securities accounts.


On June 4, 2008, ST, a client of RRJ, signed an Letter of Authorization (“LOA”) authorizing the issuance of a certified check in the amount of $20,098 made payable to a real estate settlement firm retained by the client in connection with a home purchase. Because the closing was scheduled for early in the day on June 6, the client had requested overnight delivery of the check.

On June 5, 2008, RRJ and Monk realized that the overnight package would not arrive in time and RRJ attempted to contact ST in order to get her to return to the office to sign a document authorizing the sending of the funds via wire transfer – unfortunately, ST was unavailable when the contacts were initiated.  Later that day, Monk contacted the client and explained the delivery problem and the need for the wire transfer.  Accordingly, the client verbally authorized Monk to send the funds via wire transfer, but Monk was unable to timely obtain the customer’s signature on a new LOA authorizing the wire.

At this juncture, the signed LOA on file was limited to authorizing the issuance of a check, which was contemplated to be delivered by overnight delivery. Although the client had verbally authorized the alternative delivery by wire transfer, the customer had not signed a new LOA authorizing the use wiring the funds. Faced with this dilemma, Monk copied ST’s signature from the original LOA and pasted the signature onto a new LOA instructing the Firm to wire $20,098 to the closing agent.

Both of ST’s LOAs required the signature of Branch Manager JMR, which Monk had signed.  According to the AWC, Monk understood that she had authority to sign the Branch Manager’s name when necessary for business reasons.

SIDE BAR:It appears that the AWC intended to imply that Monk’s belief that she could sign on behalf of her manager was erroneous, or that Monk should have known that it was improper and likely a rule violation for her to sign on behalf of JMR. Unfortunately, the AWC fails to clarify precisely what the issue was here and we are, at best, left to infer.  Clearly, an AWC should present the facts and the allegations with more precision.

Family LOAs

In addition to the LOA issues involving ST’s transaction, the AWC alleges that from April 3, 2005 through January 15, 2008, Monk initiated nine LOAs to transfer funds from the accounts of two immediate family members who were customers. Monk signed the customers’ names on the nine LOAs in accordance with their explicit instruction; however, she again signed the Branch Manager’s name to affirm his supervisory approval. These LOAs pertained to five transfers between accounts of the immediate family members; and a further four transfers of funds to Monk’s account for the purpose of reimburse her for monies owed by the family members:

(1) $44.72 on September 26, 2005,

(2) $67.60 on July 23, 2007,

(3) $28 on August 27, 2007, and

(4) $50 on January 15, 2008.

IRS Forms 941

The AWC alleges that from 2003 to 2009, Monk signed JMR’s name on behalf of the LLC on approximately twenty IRS Forms 941: Employer’s Quarterly Federal Tax Return. She then submitted the forms to the IRS.  It appears that the AWC is implying that Monk lacked prior written authorization to specifically sign the manager’s name on these IRS forms.


The AWC alleges that by signing and affixing customer and manager’s signatures on the LOAs and IRS forms, Monk violated NASD Rule 2110 and FINRA Rule 2010. In accordance with the terms of the AWC, FINRA imposed upon Monk a $5,000 fine and a three-month suspension.

A Word From The Respondent

In response to FINRA’s policy of permitting Respondent’s the opportunity to submit a “Statement of Corrective Action” (which does not constitute factual or legal findings by FINRA nor reflects its or its staff’s views), Monk submitted the following:

Statement of Corrective Action

I understand the gravity and significance of my prior actions and the investigation process alone has been sufficient in deterring me from engaging in any similar misguided conduct in the future. I will never, never allow myself to be placed in this type of situation again. Also, the compliance and supervision at Merrill Lynch is far more diligence and supportive. I can refuse violative conduct and not be threaten with unemployment as was the case at JMR LLC. Merrill Lynch has processes in place that better serve the client especially transactions less than $50,000. They have in place voice instructions with proper client authentication and recorded phone lines. I have been a “Far Exceeds” employee for Merrill Lynch during all 10+ years.

I have kept Merrill abreast of this investigation and was told that my U4 will be updated.

Donna K Monk


Bill Singer‘s Comment

In a “Street Sweeper” column: Morgan Stanley Smith Barney Female Employee Suspended and Fined for Unauthorized Signatures (September 23, 2011), I discussed a similar case: In the Matter of Carmela L. Knieriem, Respondent (AWC/20100247249, July 12, 2011), in which Carmela Knieriem, another industry female, a 32-year  industry veteran, was employed at Morgan Stanley Smith Barney as a registered customer service associate assigned to assist branch financial advisors, branch managers, and other employees with administrative duties. As part of those duties, the branch manager and other financial advisors often asked Knieriem to prepare certain internal administrative forms in documenting and processing requests that the branch manager or financial advisor received verbally from a customer (the “Verbal Forms”).

The AWC alleged that Knieriem prepared a number of Verbal Forms for approval and signed the names of the relevant MSSB employee who had received the verbal instruction. The AWC alleged that in violation of FINRA Rule 2010, on ten occasions between March and September 2010, Knieriem signed, without authorization, the names of her branch manager and other financial advisors to Verbal Forms:

  • On six occasions, at the request of financial advisor EP, Knieriem was asked to prepare an instruction form documenting a customer’s verbal request for the:
    • release of account statements to a third party;
    • transfer $3,505.00 from the customer’s account;
    • transfer $75,000.00 from the customer’s account
    • journal funds between the customer’s accounts (twice); and
    • issuance of a check for $75,397.22 from the customer’s account.
  • On one occasion, at the request of financial advisor GT, Knieriem was asked to prepare an instruction form documenting a customer’s verbal request to stop payment on a check from his account.
  • On one occasion, at the request of financial advisor CL, Knieriem was asked to prepare an instruction form documenting a customer’s verbal request to issue a check for $95.62 from the customer’s account
  • On two occasions, at the request of branch manager RL, Knieriem was asked to prepare an instruction form documenting a customer’s verbal request to journal funds between the customer’s accounts.

Accordingly, FINRA charged Knieriem with violating FINRA Rule 2010. Pursuant to the terms of the AWC, FINRA imposed upon Knieriem a $5,000 fine and 60-day suspension in all capacities from the securities industry.

A Tinge of Sexism?

Say what?  How does FINRA justify giving Knieriem a $5,000 fine and 60-day suspension but Monk gets a $5,000 fine and a 90-day suspension?  I’m not sure that I understand why there is a 30-day disparity between the two cases. Moreover, both women are respectively 32- and 18-year industry veterans with no prior regulatory histories.  Please consider my commentary in Knierem and consider it pretty much the same broadside on Monk’s behalf:

[M]oreover, for what it’s worth, Wall Street hasn’t exactly been a worker’s paradise for many of its women.

As I and many other industry commentators have long noted, slightly more than 50% of the U.S. population is female but when it comes to the profitable jobs on Wall Street — traders, brokers, and management — the numbers of women in such jobs are not proportionate. Of course, when it comes to receptionists, secretaries, sales assistants, back-office, and Human Resources, well, you know, there always seem to be lots of women, often far more than men. Although that’s not solely Wall Street’s shame because that disproportionate participation carries over to many industries and professions, it is still a sad commentary on how much further we still need to go in terms of equality.  READ: “Bill Singer Replies to SEC Commissioner Aguialar’s Call For Diversity (“Street Sweeper”, May 4, 2011).

In this FINRA disciplinary case, Knieriem, a 32-year veteran, was charged with engaging in misconduct during a six-month period in 2010. At the request of four registered persons, she allegedly prepared ten Verbal Forms, and then she signed the names of four registered persons without their authorization or that of MSSB. The four registered persons asked Knieriem to prepare the Verbal Forms — she’s not charged with fabricating those forms on her own initiative; it’s solely the act of the purportedly unauthorized signing.

And not one of those four registered persons had an inkling that Knieriem was signing their names? How the hell did those folks think that the customers’ verbal requests got processed if they didn’t sign the forms? And MSSB was shocked, shocked, I say, to learn that, omigod!, branch assistants are filling out forms and signing the names of brokers to those forms when the company’s rules specifically prohibit such a practice? As if such a practice doesn’t occur everyday at virtually every branch office at virtually every brokerage firm? Hey, honey, do me a favor, take care of this — I gotta get this processed ASAP. 

As if such a practice doesn’t occur, in some fashion, at FINRA itself?

I have long expressed my approval, even if sometimes grudgingly, for FINRA’s enforcement of its rules and policies against forgeries. I reiterate that support without any ifs or buts. However — ah, there is still that — in this case, I think some mitigation was warranted before FINRA slammed Knieriem into the mud.  I mean, seriously, a $5,000 fine and a 60-day suspension on top of Knieriem losing her job?

Next time, maybe someone at FINRA might sit down, scribble some words in the dirt, and tell Knieriem to get on with her life and not to sign anyone’s name to any documents again?  There are lots of stones scattered on Wall Street.  This one did not need to be thrown.

Topics: FINRA  Women  Sexism  Bill Singer  BrokeAndBroker  

Previous Entries
May 23, 2015
SEC Commissioner Stein Stands Alone In Her Defense Of The Investing Public And IndustryOne, and only one, Securities and Exchange Commissioner got it ... Read On
May 22, 2015
One, and only one, Securities and Exchange Commissioner got it right. To her ever-lasting credit and to the shame of her colleagues, Commissioner Kara... Read On
May 21, 2015
Yesterday, I tried to predict the future. A few hours before the United States Department of Justice announced its settlement with JPMorgan Chase, Cit... Read On
May 20, 2015
It is now 8:30 a.m. EDT on May 20, 2015 and I am posting this Blog without much enthusiasm – I think the fancy French word for ho... Read On
May 19, 2015
Stockbroker, Compliance, Legal, and Regulatory JobsEmployment Jobs#wallstreetjobs@brokeandbrokerNOTICE TO EMPLOYERS: BrokeAndBr... Read On
May 18, 2015
The United State Court of Appeals for the Ninth Circuit ("9Cir") affirmed the Central District of California's ("CDCA's") judgment in a clas... Read On
May 18, 2015
There comes a point in a registered representative's career when it may simply be time to move on. For many reps who decide to relocate, the questions... Read On Job Search

Related Topics
Tag Cloud
Internet FINRA Bear Stearns Bloomberg SEC NASD NYSE Money Laundering Due Diligence Waiver Forbes China Broy Woody Allen Madoff NAC NPR Marketplace Stanford UBS Ketchum Antitrust NASDAQ RRBDLAW Schapiro Bill Singer BrokerAndBroker USERRA Morgan Keegan Arbitration Counterclaim Khuzami BrokeAndBroker Aleynikov Goldman Sachs brokeandbroker Promissory Note U4 Bill SInger EFL CFTC Huffington Post Flash Crash arbitration RBC Ponzi Affinity Fraud Wachovia Criminal Raymond James Expungement Fraud Securities Fraud Outside Business Activity Registered Rep Magazine FOREX FBI Banc of America Pro Se PCAOB Supreme Court Morgan Stanley Smith Barney E*Trade Margin email Galleon Penson U5 Defamation Protocol Wells Fargo Punitive Damages Citigroup Merrill Lynch ARS Employee Forgivable Loan Street Legal Morgan Stanley AWC Fidelity Bankruptcy Broke And Broker HFT David Sobel Day Trading Ameriprise Commissions Spouse Schwab Commission CRD Kenneth Starr IRS CNBC Complaint ATM Skimming Hacking Phishing Malware Naskovets Poteroba Koval Lincoln Financial Selling Away Outside Business Activities Rakoff 2nd Circuit Second Circuit IRA 401k Forgery Tax Email Netschi Moore Whistleblower Street Sweeper Countrywide Tran Bharara Facebook Online Severance Bonus Eligibility Rule TD Ameritrade Hedge Fund SAC 1099 Smith Barney Lehman Brothers SIPC IC3 Scottrade Lehman JPMorgan Chase Hertz Insider Trading Bank of America Department of Justice Elles Bribe Auction Rate Securities Raiding Spam Edward Jones Medicare Diabetes Dow Schumer Thain Walter Bid Rigging Real Estate Discrimination Wall Street Statutory Disqualification Form U4 Form U5 Indictment Boyland DOJ Corruption bill singer FTC Do Not Call FINRA Arbitration Costa Rica Settlement LIBOR Varney Plea Rule 8210 Eligibility RRBDlaw 8210 Appeal Fowler LPL Johnson Cellphone US Airways JPM BrokeandBroker Reg D MSSB Vault Loan SunTrust Discovery Employment Rosenthal Recruiting Lawyer Trading Platform JP Morgan Employment Tuesday Wrongful Termination Bank Guarantee WaMu Solicitation REIT Martin Credit Cards Rule 3050 Away Account Credit Repair PN Advisor Placement Group Fifth Amendment Forex Mortgage Private Placement Moon CGMI Failure to Supervise Merrill Anderson Exam Lee Borrowing Tax Lien Conversion Oppenheimer Wedbush Felony Misdemeanor Expenses ING Lien OTR Estate Jobs Florida Credit Card Elderly Flash Drive Annuity Expense Reimbursement FNMA BrokeAndBroke TIC DWI Promissory Notes Suitability Will POA Power of Attorney Casino NSF MF Global Counterfeit Preet Bharara Corzine Hacker Deferred Compensation RIA Prison Disclosure NASAA Aguilar FCPA Subway Testimony Identity Theft Gold Dell Bar Injunction Bank Deutsche Bank Hospital Due Process God HSBC Private Placements Eric Stein Wire Fraud FINOP CCO Compliance Audit Joshua Brown Backstage Wall Street Obstruction of Justice Reuters Retaliation Variable Annuity Arbitraiton Outside Account Options Telephone Wine Series 7 Social Media ADA Pacifico Non-Prosecution Agreement Confirm Tax Fraud Retirement OBA Equity Indexed Annuities EIA Disability MetLife Continuing Education Cheating OIP Tax Liens Willful CE Unregistered Impersonation Annuities BBVA Business Expenses ETF JOBS Act Mail Fraud Parking Variable Annuities Signatures BitTorrent Impersonator Wire Transfer Wire Crowdfunding Nasdaq Away Accounts WSP Laptop Dodd Frank Checks RMBS AML PST Solicited Unsolicited Congress SRO Password Wife Discretion Non-Solicitation Restaurant Commodities Private Securities Transaction Offer of Settlement Money Market employment jobs Great Recession Chase Investment Services Arrest Barclays Liens Failure To Supervise Apple Time And Price T&P Willfully Husband Letter of Authorization LOA Sexism Debit Card Knight Test Practice Sale Unfair Competition Signature Judgments Undisclosed Settlement Trainee Fee Trust Laser Side Bar Mattera Female Sales Assistant Kennedy Charge Sexist NML Argentina Embezzlement Silver Investor Alert Evidence Judgment Bank Fraud Deceased Bill Singer BrokeAndBroker TSSB OHO Leveraged ETF Mary Jo White Trustee Motion To Dismiss Frumento Conspiracy 6th Circuit Proctor Commissioner Stein Rule 3040 Customer Files Class Action Beneficiary NYAG Schneiderman 11th Circuit Insurance Gallagher White Self Regulation Short Sale Compromise Website Rule 2010 Check TRO Supervision Vacatur Remand SDNY Rule 12206 BrokeAndBroker Bill Singer Piwowar Stifel Rule 1122 Article V signature Confidential Inside Information Reg SP VA Regulation SP Fees Cease And Desist Customer Rule 3270 Rule 3240 Annual Compliance Questionnaire OWB 2Cir Red Flags Payroll Stockbrokers ALJ Cybercrime Loans BrokerCheck Altered Records
Email Bill Singer Connect with Bill Singer on Facebook Follow Bill Singer on Twitter Link up with Bill Singer on LinkedIn Join Bill Singer on Google+