The "selfies" phenomenon has now hit Wall Street regulation -- well, sort of. In today's BrokeAndBroker.com Blog, we have the intriguing case of a stockbroker who whipped out his smartphone and started taking screenshots of client information on his brokerage firm's computer screens. What's the big deal? Oh, trust me, it's a big deal and FINRA was right on top of this misconduct.
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, Sadeer Thomas Jamil submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In the Matter of Sadeer Thomas Jamil, Respondent (AWC #2014041162601, February 2, 2015).
Jamil was registered with FINRA member firm Charles Schwab & Co. from 2007 to April 2014; and, thereafter, with FINRA member firm Raymond James & Associates, Inc. from April 7, 2014 to April 21, 2014.
For whatever reasons, by January/February 2014, Jamil had apparently had it with his employer Charles Schwab and seems to have made up his mind that he was soon going to move on to another firm. The AWC alleges that Jamil took over 150 photographs with his smartphone of screenshots of 147 customer accounts that he had pulled up his computer from Schwab's client database. Among the information that he photographed (described as "confidential' in the AWC) were customers' names, birthdates, addresses, account number, telephone numbers, email addresses, account balances, mother's maiden names, and account passwords.
The Down Low Download
In March 2014, Jamil allegedly downloaded the cited photos from his smartphone to his personal computer, which appears to have been located at his home because the AWC asserts that he shared it with his spouse. The downloaded photos were not encrypted or otherwise protected on either the smartphone or personal computer. After undertaking the download, the AWC asserts that Jamil reviewed the files and created two spreadsheet contact lists that included over 70 customers' names, telephone numbers and assets under management.
The AWC asserts that upon beginning employment in 2007 at Schwab, Jamil had agreed in writing to not disclose, reproduce, use or disseminate confidential information (which included certain customer information) that he would obtain during his employment. In accordance with that undertaking, Jamil purportedly agreed that upon his termination he would return confidential information, which further entailed the removal or deletion of such materials if stored, recorded, or maintained on a cellphone or other electronic device. Thereafter, in 2013, the AWC asserts that Jamil signed another Schwab agreement prohibiting his removal of confidential information and/or intellectual property subject to similar return, remove, and delete obligations noted earlier. Also, in March 2014 he agreed in writing to abide by Regulation SP and Schwab's privacy policies.
The USB Thumb's Up
Upon joining Raymond James in April 2014, Jamil transferred the spreadsheets from his home computer onto a USB thumb drive, and then used that storage device to download the Schwab customer data to his Raymond James computer.
FINRA Thumb's Down
FINRA alleged that Jamil improperly took and misused confidential, nonpublic customer information from Charles Schwab in contravention of Regulation S-P., in violation of FINRA Rule 2010. In accordance with the terms of the AWC, FINRA imposed upon Jamil a three-month suspension in all capacities with any member firm. In light of Jamil's demonstrated inability to pay a fine, no monetary sanctions were imposed.
Bill Singer's Comment
A nice, tight AWC from FINRA! The background facts are well presented and the sanction is, if anything, more than fair. In this day and age of cybertheft, the investing public and Wall Street must be sensitive to any improper access to or unauthorized use of confidential data.