September 20, 2013
Ya got a lot of clever men and women on Wall Street. Sometimes their artistry is used for good -- as in making money for their firms and customers. Sometimes the darkside beckons and, well, we all know what happened to Darth Vader. Here is yet another puzzling tale of a temptation not resisted.
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, Steven Simmons submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In the Matter of Steven Simmons, Respondent (AWC 2012031013101, September 13, 2013).
If At First . . .
Simmons was first registered in 1997 and during the times relevant to this matter, was registered from October 2010 through January 2012 with FINRA member firm Maxim Group LLC. The AWC asserts that FINRA had no prior disciplinary with the Securities Exchange Commission or state securities regulators but did enter into a prior AWC in January 2002 involving allegations that he had wrongly exercised discretion in a customer account. For that prior AWC, Simmons was suspended for 60 days and fined $7,500.
The current AWC alleges that on July 26, 2011, and September 24, 2011, Simmons submitted expense reports to Maxim that sought reimbursement for two separate $2,495 invoices for conferences that he had respectively attended earlier in the months noted. Documentation submitted by Simmons to his employer included invoices for each conference marked with a stamped "PAID 7/26/2011" and "PAID 9/24/11." Maxim reimbursed Simmons in August and October 2011 for each conference expense.
Okay, so far, so good. In fact, it's all pretty much straightforward except, well, it's not.
The July 26th conference had, in fact, been attended by Simmons but for one teensy weensy little discrepancy: The AWC alleges that the conference sponsor permitted him to "defer payment." Hence, Simmons hadn't paid the $2,495 at the time he asked for reimbursement - and, to make matters worse, he fabricated the PAID stamp. According to the AWC, Simmons eventually paid for the conference in August 2011, but that was after he had been terminated by Maxim.
SIDE BAR: Frankly, it appears that the conference sponsor had not comped Simmons with a freebie but merely deferred the conference cost until some time in August. Consequently, Simmons was essentially seeking to have the cost of the seminar "advanced" rather than reimbursed - however, that explanation does not justify respondent's fraudulent conduct.
Variation On A Theme
Not content with the July subterfuge, Simmons again fabricated a PAID stamp on the September invoice that had been emailed to him by the event's host. This time, the AWC alleges that the conference fee was waived. Now we don't even have the iffy mitigation that Simmons was seeking an advance against a charge - this time, there was not charge and it's just outright expense fraud in violation of FINRA Rule 2010.
In accordance with the terms of the AWC, FINRA imposed upon Simmons a Bar from associating with any FINRA member in any capacity.
Bill Singer's Comment
Online FINRA records as of September 19, 2013, indicate that Simmons was "Discharged" by Maxim on January 6, 2012 based upon the following allegation:
MR. SIMMONS WAS TERMINATED FOR CAUSE AFTER AN ORAL ALLEGATION WAS MADE THAT HE CUT AND PASTED A CLIENT'S SIGNATURE ONTO A COMMISSION SCHEDULE BETWEEN THE FIRM AND THE CLIENT. MR SIMMONS DENIED ANY WRONGDOING.
Another item on FINRA online records asserts that on April 3, 2012, a Maxim customer filed a FINRA Arbitration Complaint seeking $25,000 in damages and alleging:
CLIENT CLAIMS AN EMPLOYEE OF THE FIRM FORGED A SIGNATURE ON A COMMISSION SCHEDULE. ALTHOUGH CLIENT IS UNSURE IF THIS "EMPLOYEE" WAS MR. SIMMONS, THE FIRM BELIEVES IT TO BE SO.
Maxim apparently settled this case on June 18, 2012, for $12,000.
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