Fun and games on Wall Street. That's sort of the topic for today's BrokeAndBroker.com Blog. Except, well, you know, this article isn't really about fun and games but about fraud and thievery but . . . then again . . . a lot of disgruntled investors sort of think that the industry is about fraud and thievery, so, howsabout we just say that today's blog considers the case of an enterprising sales assistant and how she obtained money from her firm that wasn't hers to get. Word of warning for the clueless among you: This is NOT a how-to article and not intended as a DIY.
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, Debra Ann Paton submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In the Matter of Debra Ann Paton, Respondent (AWC # 2015044994601, June 10, 2015).
In 1984, Paton first became registered with a FINRA member firm and from May 2010 until April 1, 2015, she was registered with FTB Advisors, Inc.
During her association with FTB Advisors, Paton was the sales assistant for two registered representatives of which an individual identified in the AWC only as "YB" was one. Among Paton's responsibilities was the preparation and submission of travel and entertainment expense reports for YB
The AWC asserts that on 11 occasions between July 2012 and March 2015, Paton altered legitimate expense reports that she had previously submitted on YB's behalf by substituting in her own name. Paton submitted for reimbursement the altered reports to FTB Advisors along with copies of YB's legitimate receipts. The AWC alleges that about $3,568 in reimbursements were deposited into Paton's personal bank account and that she used those funds to pay for personal expenses.
According to online FINRA BrokerCheck reports as of June 19, 2015, FTB Advisors "Discharged" Paton on March 31, 2015, based upon allegations that:
SHE WAS SUBMITTING DUPLICATE INVOICES AND RECEIVING PAYMENT FOR WHICH SHE WAS NOT ENTITLED
FINRA deemed Paton's submission of falsified expense reports and her conversion of the reimbursements to constitute violations of FINRA Rule 2010.
In accordance with the terms of the AWC, FINRA imposed upon Paton a Bar from associating with any FINRA member in all capacities.
Bill Singer's Comment
Two quick points.
One, Paton somehow managed to get away with this fraud for nearly three years. Sure . . . it was for relatively penny-ante amounts that averaged at about $324 a pop for each of her 11 submissions; however, you sort of have to wonder how much of this nonsense is going around on Wall Street. Frankly, this case should prompt some companies to implement a more rigorous policy to verify reimbursements. After all, given that Paton was employed as a "sales assistant," I was wondering how come no one in Accounts Payable questioned the nature of the expenses for someone in her position, particularly after a nearly three-year history of such reimbursements.
Two, don't you just love how conduct that most of us would describe as "stealing from her employer through fraudulent reimbursement requests," becomes euphemized by the employer as having submitted "duplicate invoices and receiving payment for which she was not entitled."
And now, in conclusion, the musical portion of today's lesson, courtesy of Schoolhouse Rock's "$7.50 Once A Week":
Now I would like to try a slice of pizza pie
But I am high and dry
It's no joke
I should have planned ahead
I spent it all instead