In a recent FINRA regulatory settlement, we come across the plight of a FINOP who couldn't resist billing his firm for about 20 months worth of meals, which ran about $700. Doing the math, that's $700 divided by 20 and you carry the 3 and then use the square root thing with a rounding error and . . . okay, so we're talking about $35 a month in meal expenses, which is about $1 a day over 20 months. If the Respondent could have pulled this off over a span of about 33,333 months (using 30-day months and not taking into account leap year or a zombie apocalypse), he could have realized a million dollars in purloined meal expenses! Sometimes you just need to think big!
Too bad that the C-suiters at FINRA's large member firms are always meticulous about never padding their expense vouchers. Given FINRA's zeal in going after a FINOP for about$1 a day in allegedly improper reimbursement demands, imagine how bountiful a harvest the industry's self-regulatory organization would reap if the senior executives at its major firms engaged in similar misconduct. Then again, as we all know, the bosses at the big banks and brokerages never, ever pad their expense accounts. Course not. No way. Ask FINRA, they will confirm that immutable truth. Too bad because I can only imagine how easy it would be to clean up Wall Street if we held the big boys to the same exacting standards as the small fry!
HINT TO FINRA: Demand the last five years of meal reimbursement vouchers from all large firm C-suiters.
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, Robert W. Travis submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In the Matter of Robert W. Travis, Respondent (AWC 2016050632401, July 10, 2017).
The AWC asserts that from April 2014 through July 2016, Travis was registered with FINRA member firm Fidelity Brokerage Services LLC as a Financial and Operations Principal and as an Operations Professional ("FINOP"). The AWC asserts that "Travis does not have any relevant disciplinary history."
The AWC asserts in pertinent part that:
From June 2014 through January 2016, Travis submitted false expense reports to Fidelity for meals that, collectively, cost approximately $700. More particularly, Travis submitted expense reports that falsely claimed that Travis attended meals with certain employees in Fidelity's Accounting Department when, in fact, Travis had attended the meals with another employee at the Firm.
Online FINRA BrokerCheck records as of July 18, 2017, disclose under the heading "Employment Separation After Allegations" that Fidelity "discharged" Travis on June 16, 2016, based upon:
Allegation that employee provided inaccurate information in expense reports in violation of firm's Travel and Business Expense Policy. Non-sales practice related.
FINRA deemed Travis's conduct to constitute a failure to observe "high standards of commercial honor and just and equitable principles of trade'' as set forth in FINRA Rule 2010.
In accordance with the terms of the AWC, FINRA imposed upon Travis a $5,000 fine and a six-month suspension from associating with any FINRA member in any capacity.
Bill Singer's Comment
Quite a bit of irony when false charges are submitted by a FINOP in the accounting department of a company named, of all names, "Fidelity."
Today's challenge is to spend $350 on one guest at one meal. Here's my thought:
Start with $30 worth of Martinis. Order a $25 crab cocktail with a $65 steak and $20 worth of sides with a $20 cheesecake or bread pudding. I can just hear what's left of my arteries hardening. That's about $160 per person, and let's order a $200 bottle of wine ($100 per guest), which brings the total up to about $260 per guest. Add a 20% gratuity and that's $312 each . . . hmmm, where can I come up with another $38 bucks? Maybe another dessert or how about another $76 on that $200 bottle of wine?