Stockbroker Fined And Suspended In Email Transfer of Customer Info From Merrill To Ed Jones

November 18, 2015

We can debate the point endlessly: Whether customer information is or should be the property of the servicing stockbroker or of the brokerage firm -- and someone, perhaps a dim voice in the background, might even argue that the information is the customer's. Frankly, it's an old battle waged with merit on all sides. Lost in the smoke on that particular battlefield, however, is the simple fact that Wall Street is subject to many laws, rules, and regulations about what customer information may and may not be taken when a stockbroker switches employers. Some departing employees think they're clever and found a way around the industry's restrictions. Some regulators would beg to differ. Consider this recent FINRA regulatory 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, Jason Gerald Medvec submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In the Matter of Jason Gerald Medvec, Respondent (AWC  2014039937101, November 10, 2015).

Online FINRA BrokerCheck records disclose that since 2005, Medvec had been registered with seven different member firms through January 2015.  In pertinent part, he was registered with Merrill Lynch, Pierce, Fenner & Smith Inc. from April 2011 through January 2014; and with Edward Jones in January 2014. The AWC asserts that Medvec had no prior disciplinary history in the securities industry.

January 2 Email

The AWC asserts that on January 2, 2014, Medvec sent an email from his Merrill Lynch mailbox to his personal mailbox, and the email transmittal included an attachment containing Merrill Lynch customer information. That information purportedly included 50 names, 50 account numbers, and 35 telephone numbers plus various account balances.

The AWC asserts that during the relevant time, Merrill Lynch's policies required employees to protect confidential customer information to which they had gained access either through a direct transfer to them by the firm or through their ability to access the firm's files. Further, such customer information was not to be disclosed to unauthorized persons within or outside of the the firm.

January 3 Email

On January 3, 2014, the day Medvec resigned from Merrill Lynch and joined Edward Jones, he allegedly sent an email from his Merrill Lynch mailbox to his personal mailbox, and attached to that transmittal was a spreadsheet he entitled: "vacation," which purportedly contained the names of 8 Merrill customers and 9 of their account numbers. The AWC asserts that during the relevant time, Edward Jones' policies prohibited registered representatives from bringing customer-related information from their prior firm. 

The AWC characterizes the information Medvec took from Merrill as non-public personal information as defined under Regulation S-P. The AWC further asserts that the information at issue was taken without Merrill Lynch's permission and that Medvec evidenced an intent to conceal his conduct by falsely entitling the attached file as "vacation."


According to online FINRA BrokerCheck records as of November 18, 2015, employer Edward Jones "Discharged" Medvec on January 8, 2014 based upon allegations that:


Regulatory Sanctions

FINRA deemed Medvec's conduct as causing Merrill Lynch to violation Regulation S-P, in violation of FINRA Rule 2010. In accordance with the terms of the AWC, FINRA  imposed on Medvec a $5,000 fine and a 10-business-day suspension from association with any FINRA member in any capacity.

November 17, 2015: Veteran industry attorney and Blog publisher Bill Singer talks with Brittany Weiner, attorney with Imbesi Law PC, about former Wells Fargo broker Donna Sabb, and a family feud that spilled over into FINRA arbitration; Sabb, who was sued by her nieces and a nephew over "misappropriation" in accounts that Sabb established and funded, was found innocent by FINRA arbitrators. Presently, Weiner is seeking an expungement of the complaint from her records. WATCH

READ: Stockbroker Exonerated After Nephews And Niece Accuse Her Of UTMA Fraud( Blog, September 11, 2015)

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