The Woman Who Never Was

May 1, 2014

In the 1956 movie "The Man Who Never Was," the British dropped a corpse into the waters off Spain in 1943, hoping to deceive the the Nazis into believing that the deceased was a Major William Martin of the Royal Marines, who was carrying top secret information about the planned invasion of Greece. In fact, the Allies were planning to invade Sicily and hoped to dupe the Nazis into preparing for an invasion of Greece.  According to the movie, the gambit worked. In today's BrokeAndBroker Blog we have a far less intriguing tale involving a woman who never was, or, perhaps, was but wasn't actually involved in the fabricated purchase of an annuity, or, okay, look, she has nothing to do with a world war or an invasion, and this story is never going to become a movie, so let's end the history lesson here and get on to a somewhat comical bit of Wall Street hijinks.

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, Dustin E. Niemeyer submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In the Matter of Dustin E. Niemeyer, Respondent (AWC 2013037076101, April 21, 2014). 

From 2011 until April 2012, Niemeyer was registered with Waddell & Reed; thereafter, he was registered with AXA Advisors until May 24, 2013. The AWC asserts that Niemeyer had no prior relevant disciplinary history.  

A Matter Of Potential

In late 2012, Niemeyer allegedly told his AXA district manager at AXA that he had met with a potential client, who had completed paperwork to purchase a variable annuity through AXA. 

SIDE BAR: Ah yes, the "potential" client. That's like what -- the entire world? Everyone is a potential client. Oh well, whatever. 

Inexcusable

Thereafter, on multiple occasions, the manager asked Niemeyer about the progress on the annuity application. At first, Niemeyer apparently offered what the AWC characterizes as "an excuse" - just exactly what constituted the excuse is something that FINRA in its dubious wisdom has chosen to withhold from us.  

SIDE BAR: Frankly, FINRA is engaging in conclusory editorializing here because what Niemeyer offered to the manager at the time was an "explanation;" and if, as will soon be demonstrated, Niemeyer's explanation was so much garbage that it became a mere "excuse," then the AWC should have taken the time to explain to us exactly what the registered person said.

The Woman Who Never Was

Turns out that the potential cleint was someone with whom Niemeyer had never met. Worse, no paperwork for the purchase of the annuity had yet been completed. 

Yet Another SIDE BAR: It seems that there really was an individual who Niemeyer presented as a "potential client," but it is unclear as to whether she was an actual client of Niemeyer's or an actual client of someone else at AXA.-- or, perhaps, Niemeyer merely put the application in the name of someone he knew or whose name he simply stumbled upon. It is also unclear as to whether Niemeyer had ever presented the idea of a variable annuity to this individual. All of which leaves us with the head scratcher of why Niemeyer chose to use a specific individual's identity as a putative "potential client" interested in buying a variable annuity.  Of course, FINRA doesn't much care that we may be puzzled because the AWC offers not explanations on these issues.

Signed, Sealed, Delivered, But Canceled

In any event, faced with his manager's impatience, Niemeyer may have panicked and chose to take his fantasy sale to a new and higher (and worse) level. In time, Niemeyer personally filled out the application paperwork with fictitious information, including the representation of an initial $11,000 contribution. As if that bit of stupidity wasn't bad enough, Niemeyer then goes ahead and forges the potential client's signature, which he then faxes to AXA's home office in December 2012. Once Niemeyer had signed, sealed, and delivered this idiocy of an annuity application, he was toast and had basically delivered himself into the arms of FINRA. 

Musical SIDE BAR: As that great Wall Street regulator Stevie Wonder noted:

Here I am baby
Signed, Sealed, Delivered, I'm yours
(You got my future in your hands)
Here I am baby
Signed, Sealed, Delivered, I'm yours
(You got my future in your hands)

I've done a lot of foolish things
That I really didn't mean, didn't I?  


Never Mind

All of which brings us to the baffling assertion in the AWC that:

Niemeyer knew that AXA would reject the application. Thus, early on the next business day, Niemeyer called AXA's headquarters and canceled the application . . .

So, lemme see if I got this. 

Niemeyer picks a name and creates a "potential client" for the purchase of a variable annuity - but for the fact that the client never spoke to the him, never expressed an interest in a variable annuity, and never filled out any paperwork. For all we know, this client was a complete fabrication of Niemeyer's imagination. which may well explain the lack of communication between the real and fictitious persons. 

Apparently weighed down with the burden of a made-up client, Niemeyer broadens his dreamworld by fabricating an annuity application.  Oddly, he exerts all this mental effort on an application that the AWC asserts he knew that AXA would reject.  Puhlease don't ask me why he did it . . . my head is about to explode as it is. 

Finally, notwithstanding the make-believe and the certainty of rejection of the annuity application by AXA, the AWC informs us that AXA did not, in fact, reject the paperwork. To the contrary, Niemeyer simply canceled the paperwork. The explanation (or was that the "excuse" ?) that Niemeyer offered to the manager about the cancellation was that the potential client changed her mind.

A fictitious potential client changed her mind about buying an annuity that Niemeyer never spoke to her about as evidenced by an application that was fabricated but later cancelled.  Ya got all that? Really?? Seriously???

A Dose Of Reality

How did all of this wind up?  Again, in somewhat pregnant fashion that fails to answer so many questions, the AWC explains that:

Five months later, Niemeyer disclosed to AXA that he had concocted [the] application, and AXA promptly terminated his registration. . .

Yeah, I know: Why did he fess up? Had AXA uncovered some discrepancy? Did Niemeyer have a pang of conscience? Unfortunatly, I dunno the answers and the AWC ain't providin' any.

According to online FINRA documents as of April 27, 2013, AXA "Discharged" Niemeyer on May 7, 2013, based upon allegations that:

RR TERMINATED AFTER SIGNATURE IRREGULARITIES FOUND ON CLIENT DOCUMENTS

In accordance with the terms of the AWC, FINRA imposed upon Niemeyer a $5,000 fine and a six-month suspension from associating with a broker-dealer in any capacity,