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

Wells Fargo Branch Manager Barred Over iPod Purchases
Written: January 15, 2013

A stack of the iPods I now own... included are...

A stack of the iPods 

Denise Olson entered the securities industry in 1991 and by 2004 had joined Wachovia Securities, Inc. (later known as Wells Fargo Advisors, LLC) in 2004, where she served as a branch manager supervising some 50 financial advisors from about June 2005 until June 2010, at which time she was terminated for allegedly converting firm funds.

Giving Her The Business

Wachovia had provided Olson with a corporate credit card for business expenses; and pursuant to the firm’s expense policies, she was entitled to seek reimbursement for legitimate business expenses. When Olson charged personal expenses to the corporate card, she designated the charges on the firm’s internal computer system and paid those exceptions.

All In The Family

On April 2, 2010, Olson purchased for $740.10 on her corporate card, two iPods at a Best Buy store as gifts for her niece and nephew. On April 30, 2010, Olson posted the charges on Wachovia’s computerized expense reporting system as a business expense. In entering the charges for the iPods, Olson falsely described the expense as office equipment for a branch-office conference room.

Internal Audit

During an internal audit, the iPod charges were discovered, and in response to an auditor’s questions, Olson initially claimed that she had purchased equipment for the branch’s conference room; however, she ultimately admitted to having used the card for the iPod personal expenses. After being fired by Wachovia, Olson repaid the disputed charges.

The Set-Off

By way of explaining or rationalizing her subterfuge, Olson asserted that back in September 2009 when the branch office was being renovated, she had purchased two refrigerators but had not sought reimbursement.  Apparently, Olson deemed the iPods as a set-off for the refrigerators but conceded during a regulatory investigation by the Financial Industry Regulatory Authority (“FINRA”) that her self-help was a “mistake” – at a subsequent FINRA disciplinary hearing, she admitted to having “intentionally misled [her] company.” FINRA Department Of Enforcement, Complainant, v. Denise M. Olson, Respondent (FINRA Office Of Hearing Officers, Hearing Panel Decision, 2010023349601, January 4, 2013).

FINRA Hearing

The FINRA  Hearing Panel found that Olson wrongfully converted $740.10 from Wachovia and falsified her expense account in violation of FINRA Conduct Rule 2010, which required her to observe high standards of commercial honor and just and equitable principles of trade. Although the allegations did not involve a security, FINRA deems Rule 2010 to encompass any unethical business-related misconduct that reflects on an associated person’s ability to comply with the regulatory requirements of the securities business and to fulfill fiduciary duties in handling other people’s money.

In her Answer to FINRA’s Department of Enforcement charges, Olson admitted to the substantive misconduct but argued that the Hearing Panel should not sanction her for her “lapse in judgment.” During a pre-hearing conference and at the hearing, Olson confirmed that:

  1. she did not contest liability for the conversion cause of action, and 
  2. the only issue before the Hearing Panel was a determination of sanctions. 

Guilty With An Explanation

Although the FINRA Hearing Panel unanimously found on the issue of Olson’s liability, the panelists split on the sanction — with a 2:1 majority imposing  upon Olson a:

  • Bar from associating with any FINRA member firm in any capacity;
  • $1,159.71 in transcript costs; and
  • $750 administrative fees.

The Panel determined that Olson’s misconduct was intentional – citing to Olson’s admission that she saw an opportunity to recoup money she thought was owed to her, and, thereafter, took that opportunity.  Also, the majority found that Olson’s misuse of Wachovia’s expense system was consistent with an effort to conceal misconduct. Finally, the majority was dismissive of Olson’s effort to mitigate her misconduct by characterizing it as not harmful to any customers.

In considering her explanation that her conduct should be viewed, in part, as a set-off for her prior payment for the office refrigerators, the Panel responded that the proper and honest route would have been to seek reimbursement through the provided channels.  As to her repayment of the iPod expenses, the majority pejoratively characterized that act as occurring after being caught, in contradistinction to a demonstration of honesty or remorse:”There is no evidence that she would have repaid Wachovia absent being confronted about the charge. . .”

All facts and circumstances considered, the majority concluded that Olson mis-coded the iPod charges in order to avoid detection and only fessed up after being confronted by a Wachovia auditor.  As to her lamentations of having suffered enough upon losing her Wachovia job and having to settle for a lower paying position at Ameriprise, the Panel found that (footnotes omitted):

Olson’s job loss and resulting financial difficulties are irrelevant factors in determining the appropriate remedial sanction for her misconduct. Sanctions are remedial in nature, not punitive. They are designed to prevent future harm. Accordingly, the fact that Olson was fired, or has already suffered, is not a factor in determining sanctions.

The Dissent 


The dissenting hearing panelist would have imposed upon Olson only a six-month suspension and a $5,000 fine. Parting ways with the majority, the dissent found that Olson was

truly remorseful and accepted the consequences of her actions. She acknowledges that a serious sanction is warranted for her misconduct, is genuinely ashamed of her behavior, and avows that her lapse in judgment will not be repeated.  Furthermore, Olson took full responsibility for her mistake . .

In mitigating the nature and extent of Olson’s alleged misconduct, the dissent concluded that the charges presented a case that was essentially:

a single  mistake by Olson mischaracterizing a $740.10 personal expense as a business expense. There is no pattern or practice of Olson violating industry rules or violating her employing broker-dealer policies, intentionally or otherwise. Furthermore, there was no customer harm.

I do not agree with the Panel majority’s conclusion that several aggravating and no mitigating factors exist and, for the reasons outlined below, I find that Olson’s violation was serious, but not egregious. . .

Bill Singer’s Comment

Will Olson remain barred from the industry if she appeals her sanction?

READ this “Street Sweeper” column involving similar facts that resulted in a reduction of a FINRA OHO Bar following an appeal to FINRA’s National Adjudicatory Counsel (“NAC”):  

Hartford Life Wholesaler Fabricated Embassy Suite Bill For School Donation

Over the years, I have frequently written about business expense cases.  They hit at every level of Wall Street — at Goldman Sachs, Merrill Lynch, UBS, Morgan Stanley, JP Morgan, Wells Fargo.  Sometimes it’s a shlub who tried to get away with buying some Christmas presents while pretending they were business expenses. Sometimes it’s a misguided hot-shot broker or trader who takes a few pals and clients to a strip joint. Sometimes it’s a member of the C-suite who pays hundreds of thousands of dollars to decorate the office. And, yeah, sometimes it’s having the firm pay for your niece and nephew’s iPods.

ALSO READ:


 
[^top^]

Previous Entries
July 29, 2014
Stockbroker, Compliance, Legal, and Regulatory JobsEmployment Page BrokeAndBroker.com Jobs#wallstreetjobs @brokeandbrokerNOTICE TO EMPLOYERS... Read On
July 28, 2014
Funny, isn't it? You know, the way double standards work in our society. Take, for example, virtually identical crimes or torts.In the first set of fa... Read On
July 26, 2014
Broker Slips And Counter Punches Public CustomerJuly 25, 2014If you've been a stockbroker long enough, it's likely that some customer will file a laws... Read On
July 25, 2014
If you've been a stockbroker long enough, it's likely that some customer will file a lawsuit against you and your firm. Frankly, you may have screwed ... Read On
July 24, 2014
In a Financial Industry Regulatory Authority (“FINRA”) Arbitration Statement of Claim filed in May 2013, public customer Claimant Meadows asserted cau... Read On
July 23, 2014
This one ain't pretty and there's sure as hell nothing here to laugh about. In 2012, a stockbroker finds himself charged with felony child molestation... Read On
BrokeAndBroker.com Job Search
Related Topics
Tag Cloud
Internet FINRA Bear Stearns Bloomberg SEC NASD NYSE Money Laundering Due Diligence Waiver Forbes China Chepucavage Broy Woody Allen Madoff NAC NPR Marketplace Stanford UBS Ketchum Antitrust NASDAQ RRBDLAW Schapiro Bill Singer BrokerAndBroker USERRA Brokeandbroker.com Morgan Keegan Arbitration Counterclaim BrokeAndBroker.com Khuzami BrokeAndBroker Aleynikov Goldman Sachs brokeandbroker Promissory Note U4 Bill SInger EFL CFTC Huffington Post Flash Crash arbitration RBC RRBDLAW.com Ponzi Affinity Fraud Wachovia Raymond James BrokeandBroker.com Expungement Fraud Securities Fraud Outside Business Activity Registered Rep Magazine FOREX BrokerAndBroker.com FBI Banc of America Pro Se 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 RRBDlaw.com Email Netschi Moore Whistleblower Street Sweeper Tran Bharara Facebook Online Bonus Eligibility Rule TD Ameritrade Hedge Fund SAC 1099 Smith Barney Lehman Brothers 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 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 RRBDlaw Appeal Fowler LPL Johnson US Airways 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 Away Account Credit Repair PN Advisor Placement Group Forex Mortgage Private Placement Moon 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 FNMA BrokeAndBroke TIC DWI Promissory Notes Suitability Will POA Power of Attorney Casino NSF MF Global Counterfeit Preet Bharara Corzine Hacker RIA Prison Disclosure NASAA Aguilar FCPA Subway Identity Theft Gold Dell Bar Injunction Bank Deutsche Bank God HSBC Private Placements Eric Stein Wire Fraud CCO Joshua Brown Backstage Wall Street Obstruction of Justice Retaliation Variable Annuity Outside Account Options Telephone Wine Social Media ADA Pacifico Non-Prosecution Agreement Confirm Tax Fraud Retirement OBA Equity Indexed Annuities EIA MetLife Continuing Education 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 PST Solicited Unsolicited Congress SRO Wife Discretion Non-Solicitation Restaurant Commodities Private Securities Transaction Offer of Settlement employment jobs Great Recession Chase Investment Services Arrest Barclays Liens Failure To Supervise Apple Time And Price T&P Husband Letter of Authorization LOA Sexism 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 Judgment Bank Fraud Deceased TSSB Trustee Frumento Conspiracy 6th Circuit Proctor Rule 3040 Class Action Beneficiary NYAG Schneiderman Gallagher White Short Sale Compromise Website TRO Supervision SDNY Piwowar Rule 1122 Article V signature VA Rule 3270 OWB Stockbrokers
 
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+