August 28, 2013
They say that blood is thicker than water. Sometimes, however, it sort of depends upon the water that you're drinking. In a recent regulatory settlement, a family member seems to have fallen prey to the fraudulent impulses of a brokerage firm employee.
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, Laura Anne Dudek submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In the Matter of Laura Anne Dudek, (AWC 2012032011101 August 14, 2013).
In 2007, Dudek entered the securities industry as a non-registered branch office administrator with Edward D. Jones & Co., L.P. The AWC asserts that she has no prior relevant disciplinary history.
A family member of Dudek's (the exact family relationship is not provided in the AWC) maintained an IRA account at Edward Jones. Dudek was not listed as an owner or signatory for the IRA and she did not have authority to withdraw funds. Notwithstanding, the AWC alleges that from July 2009 through January 2011, Dudek signed her family member's name, without permission or authorization, on six Retirement Distribution or Internal Transfer forms, instructing the firm to wire a total of $29,000 to bank and brokerage accounts that she controlled -- these are net proceeds because Edward Jones withheld federal income taxes from each withdrawal before wiring the distributions.
Along with two minors, Dudek's family member was also a co-owner of nine United States savings bonds worth a total of $600. In February 2012, without permission or authorization, Dudek forged signatures on two Special Forms of Request for Payment of United States Savings and Retirement Securities and caused Edward Jones to guarantee the forged signatures. Dudek requested that the proceeds from the redemptions be directly deposited to a bank account held in her name, which she represented was for the benefit of the minors. Ultimately, the redemptions were denied because because Dudek had requested that the proceeds be sent to an account held in her name, but proceeds of a United States savings bond redemption can be deposited only into an account held in the name of a bond owner.
On March 20, 2012, Edward Jones terminated Dudek. In accordance with the terms of the AWC, FINRA imposed upon Dudek a Bar from association with any FINRA member in any capacity.
Bill Singer's Comment
If I have one quibble with this AWC, it's the use of the phrase "family member," which comes off both strained and perplexing. I mean, c'mon, why bother characterizing the customer as a family member in the first place but then not informing us as to whether we're talking about a father, mother, brother, sister, or third cousin twice removed and once reversed with a flourish?