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, Donald Wayne Hastings submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In the Matter of Donald Wayne Hastings, Respondent (AWC 2012033908301, February 14, 2013).
From February 2005 until August 30, 2011, Hastings was associated with Allstate Financial Services LLC. The AWC asserts that he had no prior disciplinary history.
In February 2009, a 73-year-old customer contacted Hastings about opening an Individual Retirement Account ("IRA"); and, thereafter, believing that he would earn 5% on his investment, the customer provided Hastings with a $12,000 check towards opening the IRA. The customer did receive interest payments. In July 2012, the customer contacted an Allstate representative to inquire about his IRA account and was informed that no such account existed at the firm.
What the hell?
According to the AWC, an IRA could not have been opened because of the customer's age - likely referring to Traditional IRAs that require you to be under the age of 70 1/2 at the end of the calendar year in which you want to make a contribution.
More to the point, the AWC alleges that the stockbroker never created the IRA nor opened an account for the customer; instead, Hastings allegedly deposited the customer's funds in a business account under his direction and control. That commingling of customer funds with Hasting's account was undertaken without the authorization or approval of the customer or Allstate. The interest payments received by the customer were apparently paid out of Hasting's pockets.
The good news is that around September 2012, Hastings reimbursed the customer for the initial funds plus interest.
By allegedly placing customer funds in his personal business account, Hastings failed to observe high standards of commercial honor and just and equitable principles of trade and thereby violated FINRA Rule 2010. In accordance with the terms of the AWC, FINRA imposed a Bar upon Hastings.