by Bill Singer
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, Arthur Yurkovskiy submitted a Letter of Acceptance, Waiver and Consent (“AWC”), which FINRA accepted. In the Matter of Arthur Yurkovskiy, Respondent (AWC . 2011027985301, September 5, 2012).
Yurkovskiy entered the securities industry in August 2007, and in July 2008 was registered with W&S Brokerage Services, Inc., from which he was permitted to resign on May 10, 2011.
Shoplifting
Bill Singer
While registered with W&S on August 13, 2010, Yurkovskiy was arrested in the parking lot of a department store and was charged with felony robbery in connection with alleged shoplifting.
On October 29, 2010, Yurkovskiy pled guilty to and was convicted of a reduced charge of misdemeanor theft. According to online FINRA documents as of September 12, 2012:
SENTENCED TO COUNTY JAIL FOR 6 MONTHS. SENTENCE SUSPENDED
REQUIRED TO SERVE ONE YEAR ON PROBATION
ORDERED TO PAY RESTITUTION TO MACY’S IN THE AMOUNT OF $40.84
ORDERED TO PAY SUPERVISION FEE OF $100
ORDERED TO PAY COURT COSTSSIDE BAR:
Article V, Section 2(c) of the FINRA By-Laws of the Corporation requires that associated persons keep their Forms U4 current at all times, with amendments filed within 30 days after learning of the facts or circumstances giving rise to the amendment.
FINRA Rule 1122 prohibits associated person from filing misleading registration information.
The Uniform Application for Securities Industry Registration or Transfer (“Form U4”) asks several questions seeking information relating to criminal charges, guilty pleas, and/or convictions. In particular, associated persons are asked whether they have “ever”:
Disclosure
After his felony charge and subsequent misdemeanor guilty plea and subsequent conviction, Yurkovskiy was required to amend his Form U4 within 30 days to disclose those three distinct events.
Yurkovskiy’s misdemeanor plea and conviction were not noted on his U4 until a February 15, 2011 amendment (some 2 ½ months late) – the felony charge was not disclosed via amendment until April 5, 2011 (some 7 months late). The AWC deemed the untimely amendments as violations of Article V, Section 2(c) of FINRA’s By-Laws of the Corporation, FINRA Rule 1122, and FINRA Rule 2010.
In accordance with the terms of the AWC, FINRA imposed upon Yurkovskiy a $5,000 fine and a 60-day suspension from associating with any FINRA member firm in any capacity.
Bill Singer‘s Comment
FINRA did not charge Yurkovskiy with “willfully” failing to disclose his felony charge and subsequent misdemeanor plea and conviction — which, in and of itself, would have constituted statutory disqualifications. Given the fact pattern set forth in the AWC, the imposition of a $5,000 fine and 60-day suspension seem a fair and measured sanction.
“Street Sweeper” regularly covers these FINRA U4 criminal disclosure cases. Folks at Merrill Lynch, Morgan Stanley, JP Morgan, Wells Fargo,Citigroup, and other major organizations are just as apt to fall victim to the intricacies of what needs to be disclosed and when as their counterparts at smaller shops. For more background, READ: