In your wallet is the corporate credit card. You know it's there. I know it's there. Hell -- your firm knows it's there because they gave it to you. The thing is, though, that every so often you get a somewhat itchy finger and figure, what the hell, who's gonna know? Maybe it's for a couple of tickets for you and your kid to the local sporting event. Hey, how's anyone gonna know if you say you took a client? Maybe it's that deluxe dinner for you and your girlfriend at that hot, new spot downtown -- she could have been a client, right? Before you go for the swipe, just ask yourself if it's worth your career. Think I'm overstating the case? Read on!
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, Respondent submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. AWC 2014040437001, September 24, 2014 (Ed: Name of Respondent redacted at the discretion of BrokeAndBroker.com).
Respondent entered the securities industry in June 2007 and from March 2001 until February 2014 was a junior research analyst in the U.S. Consumer and Retail Research Division of FINRA member firm J.P. Morgan Securities LLC. The AWC asserts that Respondent had no prior disciplinary history in the securities industry.
City Of Angels
The AWC alleges that Respondent had been given firm-issued MasterCard corporate credit card, and he was authorized to use it for authorized business travel and other business expenses. During the period of December 6 through 9, 2013, the AWC alleges that Respondent was in Los Angeles, CA pursuant to the request of his Managing Director ("MD"). The MD covered certain clients in his research and related activities, and had apparently asked Respondent to assist by making visits to those covered accounts.
The AWC asserts that Respondent was supposed to engage in certain client activities on the evening of Friday, December 6 through December 9, 2013, but although he was in Los Angeles for that expressed purpose, "he did not assist with or participate in any client activities until Monday, December 9, 2013."
How does all of this become a regulatory concern you might ask? Okay, go ahead and ask. Hey, thanks for asking.
Wine And Dine
The AWC alleges that on December 6, 7, and 8, 2013, Respondent paid with the MasterCard for $688.10 in personal meal and drink expenses, for which he sought reimbursement in December 2013 and January 2014. As part of his submission for reimbursement, Respondent purportedly attached restaurant receipts on which he indicated the names of clients that he had entertained for those charges. The AWC alleges that the individuals at the cited meals were not clients but personal friends of Respondent's . . . and at some of the meals it appears that only Respondent was the diner.
Although Respondent purportedly knew that his personal meal and drink expenses were not reimbursable under firm policy, he converted his employer's funds by misrepresenting the nature of those expenses to improperly obtain reimbursement in violation of FINRA Rule 2010. According to online FINRA records as of October 2,, 2014, J.P. Morgan Securities LLC "Discharged" Respondent on February 4, 2013, based upon allegations that:
THE FIRM CONCLUDED THAT THE EMPLOYEE USED THEIR CORPORATE CREDIT CARD FOR PERSONAL EXPENSES IN VIOLATION OF JP MORGAN CHASE & CO. POLICY. NO CLIENT HARM
In accordance with the terms of the AWC,d FINRA imposed upon Respondent a permanent Bar from associating with any FINRA regulated broker-dealer in any capacity.