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, William Mitchell Tillett submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In the Matter of William Mitchell Tillett, Respondent (AWC 20110274376, October 3, 2012).
In 1985, Tillet first became registered with NYLife Securities LLC , where he remained until he was terminated on September 27, 2011, after the firm became aware that he had been charged with reportable criminal offenses (which he had not timely disclosed). The AWC asserts that Tillet had no prior securities industry disciplinary history.
Sidestepping the Felony
On January 21,2011, Tillett had been arraigned on a disclosable felony trespassing charge, which NYLife first learned about on March 11, 2011. Beginning March 28, 2011, the firm suspended Tillett and, thereafter, amended his Uniform Application For Securities Industry Registration Or Transfer ("Form U4″) to reflect the felony charge. On June 15, 2011, the felony charge was reduced to a non-reportable summary offense for trespassing and NYLife permitted Tillett to resume his registered representative position.
Tripping On The Misdemeanor
On September 19,2011, Tillett was charged with the misdemeanor offenses of theft by unlawful taking and theft of services. NYLife learned about this charge on October 27,2011, and terminated Tillett that day.
SIDE BAR: According to online FINRA records as of October 9, 2012:
By The Book
The AWC asserted that Tillet had willfully failed to timely disclose the criminal charges against him, in violation of violated FINRA By-Laws Article V, Section 2(c) and FINRA Rules 1122 and 2010. In accordance with the terms of the AWC, FINRA imposed upon Tillet a $5,000 fine and a 6-month suspension. As admonished in the AWC:
Tillett understands this settlement includes a finding that he willfully omitted to state a material fact on a Form U4, and that under Section 3(a)(39)(F) of the Securities Exchange Act of 1934 and Article III, Section 4 of FINRA's By-Laws, this omission makes him subject to a statutory disqualification with respect to association with a member. . .
For registered persons and industry applicants, a number of valuable takeaways:
"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. Moreover, given the frequency with which industry members run afoul of the disclosure obligations for charges and convictions, you must be aware of the events that need to be disclosed and the windows for such disclosure.
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