August 21, 2014
I keep writing about fraudulent customer email requests for wire disbursements in the apparently misguided hope that someone will read my warnings and avoid a career catastrophe. Notwithstanding my best efforts, the reports of violations roll in. Consider this recent FINRA settlement.
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, Glen Scot Jones submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In the Matter of Glen Scot Jones, Respondent (AWC 2013038815501, August 12, 2014).
Jones entered the securities industry in 2002 and was first registered in 2006. By November 2012, Jones was registered as a Senior Registered Client Service Associate with FINRA member firm UBS Financial Services, Inc. The AWC asserts that Jones had no prior disciplinary history.
Three Days In August
By emails transmitted to Jones on August 6, August 20, and August 27, 2013, it appeared that a UBS customer (identified in the AWC only as "DES") was requesting via his AOL e-mail account the disbursements of $85,000, $68,900, and $89,450, respectively, via wire from the UBS account to a third-party bank account.
Reach Out And Touch Someone
In response to those three emails, Jones completed a UBS wire disbursement request , which he submitted for approval. The accompanying attestation form for each request contained a false representation by Jones that he had spoken to DES and confirmed the wire requests. Additionally, Jones falsely confirmed that he had spoken to DES and, in fact, knew theclientpersonally and recognized his voice during the telephone call. Following Jones's submissionof the wire requests, UBS branch personnel contacted Jones to confirm his personal conversation with DES, and, yet again, Jones falsely affirmed those communications. Pointedly, Jones had not spoken to DES about the three wires at issue.
We Told You So
At the relevant times, UBS's written policies and procedures required employees to have a conversation with customers prior to processing a wire disbursement to a third-party bank account. Further, the required client contact was to be memorialized in the firm's internal systems through an attestation form. The AWC asserts that at "all relevant times, Respondent was aware of the Firm's customer verification requirement."
Adding Up The Costs
Based upon Jones's submitted requests and false attestations, UBS disbursed $243,350 from DES' Firm account to third-party bank accounts. In the end, DES's AOL account had been hacked and the funds were sent out to the hacker.
In an online FINRA report, UBS reported that it had "Discharged" Jones on October 2, 2013, based upon allegations that:
MR. JONES'S EMPLOYMENT WAS TERMINATED AFTER THE FIRM LEARNED THAT, ON THREE OCCASIONS, HE INACCURATELY ATTESTED IN THE FIRM'S RECORDS THAT A CLIENT'S TRANSFER OF FUNDS TO A THIRD PARTY HAD BEEN VERBALLY CONFIRMED WITH THE CLIENT, AS REQUIRED BY FIRM POLICY, WHEN IN FACT IT HAD NOT BEEN
FINRA deemed that Jones's misrepresentations to UBS constituted violations of FINRA Rule 2010; and that his submission of three falsified wire disbursement requests caused inaccurate books and records in violation of FINRA Rules 4511 and 2010. In accordance with the terms of the AWC, FINRA imposed upon Jones a $7,500 deferred fine and a 60-day suspension in all capacities.