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, Matt David Degenhart submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In the Matter of Matt David Degenhart, Respondent(AWC 20120352602,March 15, 2013).
Degenhart entered the securities industry in June 2008 as a registered representative with MetLife Securities Inc. ("MetLife" ), where he remained until his January 9, 2013, termination. The AWC asserts that Degenhart did not have any prior relevant disciplinary history.
Sometime in August 2012, a client of Degenhart's complained to him that she was not earning any interest on deposits in her checking account and needed money to cover upcoming legal expenses. In response, the AWC asserts that Degenhart advised the customer against investing her checking funds in stocks; moreover, he apparently suggested that she give him the funds on deposit in her checking account, and he would "help her earn a little more interest on it than she currently was receiving."
Apparently trusting in Degenhart, on August 29, 2012, the customer gave her stockbroker a $2,500 check with the payee line left blank (Degenhart filled in his name). Thereafter, the stockbroker deposited the check into his personal checking account and used the funds for what the AWC asserts were personal expenses.
Truth Or Dare?
Okay, so, c'mon now, let's be honest with each other. You know what you're thinking. The reason that this became a FINRA regulatory matter is because the stockbroker ripped off his trusting customer and pocketed the $2,500 and then left the women hanging when the lawyer bills arrived. And if you're not gonna fess up to that then, fine, that's where I thought this was going.
On or about December 11, 2012, Degenhart's customer informed him that she had received a lawyer's bill, and on December 12, 2012, Degenhart gave to her a $2,597.09 cashier's check (representing the full return of the $2,500 principal plus about 1.6% interest over the roughly 3 ½ month period).
Not what you expected, right?
Oh, and the AWC says nothing about the check bouncing or the customer complaining about the interest or the customer complaining about anything. Looks like Degenhart kept his word and the customer was happy.
FINRA Sounds The Alarm
The AWC fails to disclose how or why FINRA or MetLife got involved - or why the transaction was even deemed a regulatory matter. What the AWC does assert is that 'Degenhart violated FINRA Rule 2010 by converting funds from [the customer] for his personal use, without [the customer's] knowledge or authorization."
SIDE BAR: Not specified in the AWC and, as such, I dug this up on my own, online FINRA records as of March 21, 2013, disclose that Degenhart was discharged by MetLife on January 9, 2013, based upon allegations that: