For some reason, Hollywood believes that bank employees are more honorable and law-abiding than their counterparts at brokerage firms. Think of it as the competition between the fictional George Bailey in "It's a Wonderful Life" versus the fictional Gordon Gekko in "Wall Street" or the real-life Jordan Belfort in "The Wolf of Wall Street." In truth, however, we got bad guys in all walks of life. The brokerage industry has no monopoly when it comes to moral turpitude in the financial industry: we got crooks and lowlifes among the ranks of bankers, insurance agents, and investment advisors. Consider this recent regulatory settlement involving a bank Branch Manager.
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, Jorge Gonzalez submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In the Matter of Jorge Gonzalez, Respondent (AWC 2014042222101, March 30, 2016).
The AWC asserts taht Gonzalez entered the securities industry in 2002, and by December 2005, he was registered with Wells Fargo Advisors, LLC., where he served as a Branch Manager for the firm's affiliated bank.
SIDE BAR: The FINRA AWC is meticulous in not naming the "affiliated bank" of Wells Fargo Advisors, LLC. As I often note in response to such non-disclosure, I'm not quite sure what the state secret is here or why FINRA goes through the charade of believing that the detection of the bank's identity is a challenge. Simply by going on to Gonzalez's BrokerCheck report, I discovered that under the "Employment History" heading, he was employed from May 2009 to the Present at both Wells Fargo Advisors LLC and Wells Fargo Bank NA.
As to why Gonzalez's "Registration History" disclosed that he was terminated as of August 2014 by Wells Fargo Advisors, LLC but he is listed as still employed by that firm under the "Employment History" heading is a bit mystifying but I will leave it up to the good folks at FINRA to resolve that existential dilemma. For those of you wondering, "yes," I do understand that there is a difference between being registered and being employed, but I find it hard to believe that Gonzalez is still employed at Wells Fargo but, hey, I find lots of things hard to believe and am frequently surprised. After all, life is like a box of chocolates, you never know what you're going to get.
The Purported Customer
The AWC alleges that in June 2014, Gonzalez directed a subordinate to open a bank account for a purported customer, who was not physically present.; and, allegedly, Gonzalez knew that opening an account under such circumstances was a violation of bank policy. In an effort to further his scheme, Gonzalez allegedly instructed the subordinate to enter into the bank's computer system a notation that the subordinate had met the customer. Not only had the subordinate not personally met the customer but she had not observed Gonzalez having such an encounter.
The IRS Check
In initially funding the new account, Gonzalez gave his subordinate an Internal Revenue Service check in the amount of $5,668 . The AWC asserts that the check had been issued "in connection with what was eventually determined to be a fraudulent tax-return filing." Not only did Gonzalez approve the account but as Branch Manger, he was responsible for its supervision. The AWC asserts that given his supervisory role over the account, it evaded the supervisory review and scrutiny by another supervisor of the circumstances attendant to its opening.
The day after the account was opened and funded, the AWC asserts that Gonzalez withdrew $5,000 without the purported customer being present, which was also a violation of bank policy. Gonzalez allegedly withdrew the remaining balance of funds about two weeks later, again without the presence of the purported customer. On the date of the second withdrawal, the initial $5,668 check was returned to the bank unpaid.
Following the banks investigation of the loss in the account, Gonzalez apparently claimed that the purported customer had been present on both withdrawal dates. The AWC asserts that "no one else recalled seeing the purported customer and the bank's video surveillance tapes did not corroborate Gonzalez's claim,"
According to online FINRA BrokerCheck records as of April 11, 2016, Wells Fargo Advisors "Discharged" Gonzalez on July 31, 2014, based upon allegations that:
A WFNA CUSTOMER FILED A FRAUDULENT TAX RETURN AND DEPOSITED THE REFUND CHECK INTO HIS CHECKING ACCOUNT. BANKER PERSONALLY WITHDREW FUNDS FROM THE CUSTOMER'S ACCOUNT BEFORE THE CHECK WAS RETURNED AND CLAIMS TO HAVE PROVIDED THE FUNDS TO THE CUSTOMER
FINRA determined that Gonzalez had converted 'funds from a bank customer account that was previously opened in contravention of the bank's policies and funded with a check that was later connected to a fraudulent tax-return filing. Gonzalez violated FINRA Rule 2010." In accordance with the terms of the AWC, FINRA imposed upon Gonzalez a Bar from associating with any FINRA member in any capacity.