November 11, 2013
In today's BrokeAndBroker Blog, we have a situation where a broker has engaged in what comes off as a fairly comical bit of misconduct but for the impact upon his career -- and but for the fact that the same misconduct by the hands of more malevolent actors could have accomplished far more terrible deeds.
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, Michael J. Davey submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In the Matter of Michael J. Davey, Respondent (AWC 2011029936801, October 29, 2013).
Davey first became registered in 2005 with member firm MetLife Securities Inc. The AWC asserts that he did not have any prior relevant disciplinary history with the Securities and Exchange Commission, any self-regulatory organization or any state securities regulator.
The Verbatim Allegations
I have been writing about Wall Street regulatory matters for over two decades and this is one of those rare occasions where I'm left somewhat speechless by the nature of an alleged violation. No - it's not that Davey engaged in a particularly horrific bit of fraud; quite to the contrary, the misconduct is relatively benign. Not only did Davey do something that he should not have, but you are left shaking your head and wondering just what the hell he was thinking (assuming that he was). Far above my power to add or detract, let me simply offer this full-text quote from the AWC:
FACTS AND VIOLATIVE CONDUCT
In June 2009, Davey falsified a form that authorized an insurance company to withdraw money each month from the bank account of Davey's customer, H.T., to pay the premium on a life insurance policy that Davey recommended to H.T. Davey prepared the falsified form by photocopying H.T.'s signature from another document and taping it to the automatic withdrawal form. Davey then submitted the falsified form to an insurance company.
In October 2009, Davey signed the name of a second customer, W.G., to an "illustration" of an insurance policy that Davey recommended to W.G. Davey then submitted that form to an insurance company. Both customers sought to purchase the insurance policies that Davey recommended to them, but neither H.T. nor W.G. authorized Davey to affix their signatures to forms, or consented to his acts. Based on this conduct, Davey violated FINRA Rule 2010.
According to online FINRA documents as of November 7, 2013, MetLife discharged Davey on September 6, 2012, based upon allegations that the:
REGISTERED REPRESENTATIVE DID NOT FOLLOW COMPANY POLICY WITH RESPECT TO CUSTOMER SIGNATURES ON ACCOUNT DOCUMENTS
In accordance with the terms of the AWC, FINRA imposed upon Dave a $5,000 fine and a three month suspension from associating with any FINRA member firm in any and all capacities .
Bill Singer's Comment
Seriously? I mean, really? Taping a photocopied signature to a form? Howsabout someone show Davey the SCAN feature on his home or office printer. On the other hand, fuggedaboutit, Davey may only get himself into even worse trouble should he try to paste (rather than digitally embed) the scanned signature into a document.
SIDE BAR: Yeah, I know. Now you've gone and done it, Bill. All over Wall Street, I can just about hear them thinkin'. . . hmmm, I never thought of scanning the signature into a document and then faxing or emailing the final version. No one will see the forgery. Hey Bill, thanks for the tip!