If you were to waltz yourself into one of Wall Street's compliance departments, you would find a whole group of folks pondering the ramifications of far too many stockbrokers' ideas about what constitutes "customer service." Sometimes, the bad guys are just bad guys; other times, it's more nuanced: You sort of appreciate that the misconduct began as well-intentioned customer service but, geez, what the hell was he thinking? In today's BrokeAndBroker.com Blog, we sort of know what the hell the stockbroker was thinking but like the compliance officers that were left to clean up this mess, we're partially puzzled and (if we're being honest) partially amused.Case In PointFor 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, Jose J. Perez submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In the Matter of Jose J. Perez, Respondent (AWC 2015044718001, June 1, 2017). The AWC asserts that Perez was first registered in 1998 with FINRA member firm MetLife Securities, Inc. The AWC alleges that Perez had no prior disciplinary history.
SIDE BAR: Online FINRA BrokerCheck records as of June 12, 2017, disclose that Perez first passed his Series 63 examination in February 1997 although his registration date with MetLife is indicated as starting on March 1998.Client SGThe AWC asserts that from 1998 to 2014, Perez was the registered representative of record for an individual identified in the document only as "SG," and that during that 16-year span "SG held an IRA account at MetLife Securities."
SIDE BAR: It is unclear whether SG had only an IRA account or if the customer had several MetLife Securities accounts.The AWC asserts that in January 2014, SG advised Perez that she was retiring and requested that he transfer pension funds held by a third party company in her IRA account. Thereafter, the AWC alleges that:
On or about December 2, 2014, in an attempt to accommodate the request made by his customer, Perez and his assistant called the third party company on the telephone. Rather than disclosing their real names, however, the assistant impersonated SG, and Perez identified himself as SG's brother. In furtherance of the call and while maintaining their impersonated roles, the assistant (posing as SG) stated that she was authorizing the company to take her brother's direction concerning her retirement funds. Perez then directed the company to transfer funds to the MetLife IRA account.Doubling DownThe AWC asserts that Perez was unaware that SG had two retirement accounts with the third-party company: a pension fund and a 401(k). The AWC states that a as result of Perez's direction, the 401(k) accounts funds were transferred to MetLife rather than the funds in SG's pension account. Son Shine The AWC asserts that SG's son complained and the transaction was reversed.
SIDE BAR: The AWC does not indicate whether SG's son had complained with his mother's authorization. Further, there is no indication whether the son was exercising any power of attorney or in furtherance of any guardianship or similar legal role.SanctionsFINRA deemed Perez's impersonation to constitute a violation of FINRA Rule 2010. In accordance with the terms of the AWC, FINRA imposed upon Perez a $5,000 fine and a 30-calendar-day suspension from associating with any member firm in any and all capacities.
CLIENT ALLEGES THAT MR. PEREZ NEVER EXPLAINED ABOUT ANY KIND OF SURRENDER CHARGES REGARDING THE VARIABLE UNIVERSAL LIFE INSURANCE POLICY PURCHASED IN DECEMBER OF 2003. CLIENTS ALSO ALLEGE THAT HE COULD GET HIS MONEY ANYTIME HE WANTED.
THE REGISTERED REPRESENTATIVE ADMITTED TO INITIATING THE TRANSFER OF A CUSTOMER'S ACCOUNT WITHOUT HER CONSENT