April 29, 2013
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, Akber Syed submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In the Matter of Akber Syed, Respondent (AWC 2012033122901, April 24, 2013).
Non-Registered, Associated Person
Syed entered the securities industry in 2010 as an associated, non-registered person, and on November 1, 2010, he was employed by Merrill, Lynch, Pierce, Fenner & Smith, Inc. until his June 13, 2012, termination. Syed's title at Merrill Lynch was Quality Assurance Analyst, and he was responsible for testing trading system software. The AWC asserts that his job involved functions beyond mere ministerial or clerical duties.
SIDE BAR: What's the importance of FINRA stressing that Syed engaged in conduct that was more than merely ministerial or clerical? For one thing, employees whose job consists solely of clerical and/or ministerial conduct are normally exempt from FINRA registration.
The AWC alleges that on April 4, 2012, Syed wrote a check from his account at Brokerage Firm 1("BD1") and deposited it into his account at Brokerage Firm 2 ("BD2"), knowing that there were insufficient funds ("NSF") in his BD1 account. Moreover, immediately after depositing the subject check, Syed allegedly wired the funds back into his BD1 account in order to cover his purchase of Apple options, which thereafter expired unexercised. The AWC alleges that Syed's NSF check was returned but that he subsequently deposited into his BD2 account covering funds.
On April 7, and April 24, 2012, the AWC alleges that Syed deposited two additional NSF checks from his BD1 account into his BD2 account; however, on these two dates he was unable to wire funds back into his BD1 account.
The AWC asserted that Syed's three NSF checks and attendant conduct was inconsistent with FINRA Rule 2010, which requires the observance of high standards of commercial honor and just and equitable principles of trade.
The Regulatory Bill
In consideration of the terms of the AWC, FINRA imposed upon Syed a three-month suspension in all capacities with any FINRA member firm. In light of his financial status, no monetary sanctions were imposed upon Syed.