June 6, 2014
After you read this one, you'll likely be shaking your head. What the hell actually works on Wall Street when it comes to hiring, to in-house compliance oversight, and to industry regulation? If you can find a more damning bit of evidence that there's a lot wrong on the Street and it ain't necessarily gettin' fixed, be my guest. Today's BrokeAndBroker Blog puts Wall Street's dirty laundry on display for all to see.
Case In Point
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, Gregg M. Kuchar submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In the Matter of Gregg M. Kuchar, Respondent (AWC 2013035724701, May 29, 2014).
Past As Prologue?
The AWC asserts that Kuchar was first registered in 1982 and went on to associate with several firms.
- In September 2003, one employing firm purportedly terminated him because "he had signed forms on behalf of a customer without that customer's authority."
- In December 2007, another employing firm purportedly terminate him because "he had impersonated an elderly customer in order to obtain private information on an account for which he was not the representative of record.
Notwithstanding that record, in May 2012, Kuchar was registered with Peak Brokerage Services, LLC. Alas, the AWC alleges that in January 2013, Peak terminated Kuchar for "signing clients' names on documents." Wow, didn't see that coming.
Here's a fascinating tidbit from FINRA's AWC: "Kuchar has no formal disciplinary history."
The AWC asserts that in December 2012, an elderly client apparently desired to transfer and sell an investment in order to utilize the proceeds. The AWC asserts that Kuchar forged the elderly client's signature on an account transfer form and also on an IRA Distribution/Withholding Form.
In late 2012, two elderly clients of Kuchar's died. The couple did not leave any children or beneficiaries. Thereafter, in January 2013, Kuchar allegedly forged the signatures of the two recently deceased elderly clients on a Transfer of Death Registration Form ("TOD"); and backdated the TOD to July 2010. Kuchar designated himself as the sole beneficiary of the deceaseds' real estate investment trust shares valued at about $210,000. Kumar submitted the TOD form to the issuer. The issuer, however, had concerns about the TOD, froze the deceased couple's account, and contacted Peak. Apparently in a letter dated January 23, 2013, Kuchar admitted to forging the signatures.
Also in January 2013, the AWC alleges that Kuchar impersonated an elder client and called two companies in order to obtain confidential information about that client's account. The information sought would have permitted the withdrawal of the client's Required Minimum Distributions from an investment.
FINRA Steps In
FINRA deemed Kuchar's conduct to constitute violations of FINRA Rule 2010. In accordance with the terms fo the AWC, FINRA imposed upon Kuchar a Bar from association with any FINRA member firm in any capacity.
Bill Singer's Comment
Online FINRA documents as of June 6, 2014, disclose that on September 11, 2003, Kuchar was "Discharged" by Jefferson Pilot Securities Corp. based upon allegations that:
REPRESENTATIVE SIGNED FORMS ON BEHALF OF CUSTOMER WITHOUT CUSTOMER'S AUTHORITY.
As disclosed online, Kuchar's response to that discharge was:
MY CLIENT HAD SIGNED A MUTUAL FUND APPLICATION IN THIRTEEN AREAS AND FAILED TO SIGN TWO OTHER PLACES THAT WERE OVERLOOKED - LATER, NOTICING THE ERROR, I SIGNED THE CLIENT NAME EXPEDITE [sic] THE APPLICATION
Online FINRA records as of June 6, 2014 disclose that on December 5, 2007, Synergy Investment Group, LLC "Discharged" Kuchar based upon allegations that
RECEIVED CALL FROM PRUDENTIAL INSURANCE COMPANY THAT MR. KUCHAR WAS OBTAINING INFORMATION THROUGH FALSE PRETENSES
As disclosed online, Kuchar's response to that discharges was:
MR. KUCHAR CALLED PRUDENTIAL INSURANCE COMPANY PRETENDING TO BE AN ELDERLY WOMAN IN ORDER TO OBTAIN PRIVATE INFORMATION ON AN ACCOUNT THAT HE WAS NOT THE REPRESENTATIVE OF RECORD
Finally, online FINRA records as of June 6, 2014, disclose that on January 23, 2013, Peak Brokerage Service, LLC "Discharged" Kuchar on January 23, 2013, based upon allegations:
Truly, I'm tempted to say something here and to launch into a jeremiad about the integrity of Wall Street's hiring practices and the value of the industry's regulatory system. BrokeAndBroker Blog readers are all too familiar with my bombast and sarcasm on those issues. For today, though, I'll just let the record of this case speak for itself.
PBS CONDUCTED AND [SIC] INTERNAL REVIEW AFTER BEING ALERTED TO DISCREPANCIES IN CONNECTION WITH A TRANSFER OF DEATH (TOD) FROM [sic] THAT KUCHAR SUBMITTED TO A REIT FOR THE ACCOUNT OF HIS FORMER CLIENTS. DURING THE REVIEW, KUCHAR ADMITTED TO SIGNING CLIENTS' NAMES TO THE TOD FORM, AFTER THE CLIENTS WERE DECEASED, AND THEN SUBMITTED THE TOD FORM TO THE REIT