June 6, 2018
In today's BrokeAndBroker.com Blog we come upon the sad tale of an unregistered associate who sought to go the extra step -- the extra mile -- in terms of customer service. When a brokerage customer encountered delays in transferring his account, the associate did what she needed to do in order to break the logjam. In hindsight, she was a tad over zealous. Making matters worse, she lied to FINRA. Alas, it does not end well.
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, Francis Keyla Acosta submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In the Matter of Francis Keyla Acosta, Respondent (AWC 2015048332401, May 31, 2018).
The AWC asserts that Acosta first became associated on July 16, 2015 with FINRA member firm Transamerica Financial Advisors, Inc., via the filing of a Form NRF (Non-Registered Fingerprint). The AWC asserts that Acosta was a "non-registered associate who assisted a
registered representative with securities related business including, but not limited
to, customer account transfers."
On March 31, 2016, Transamerica allegedly filed a Form U4 for
Acosta to facilitate her registration but she remained associated with the firm in an unregistered capacity until her May 31, 2017, termination.
FINRA asserts that Acosta has "no prior disciplinary history with the Securities and Exchange
Commission, any state securities regulator or self-regulatory organization."
Facilitating Account Transfer
The AWC alleges that in November 2015, a customer identified only as "AC" attempted to transfer his account from
another broker-dealer to TFA. For reasons not explained in the AWC, by December 2015, the transfer had not been
completed. The AWC then asserts that in violation of FINRA Rule 2010:
In order to facilitate the transfer of AC's account and with the
customer's authorization, Acosta caused someone to impersonate AC during five
telephone calls with the prior broker-dealer.
Completing Account Transfer
The AWC further alleges that in violation of FINRA Rule 2010, with AC's knowledge and authorization, in order to complete that account transfer, Acosta signed the customer's name four times on a Replacement of Life Insurance or Annuities form and accompanying documents because "AC was not available to complete the forms."
Denied. Denied. Admitted.
Finally, the AWC asserts that in another violation of FINRA Rule 2010:
In March 2016, Acosta provided an oral statement to FINRA staff during which
she denied having caused another person to impersonate a customer. In addition,
in a written response to FINRA's request to her employing firm, Acosta again
denied having caused another person to impersonate a customer. Finally, in
March 2017, during her on-the-record interview, Acosta admitted to causing
another person to impersonate AC on five telephone calls with another broker-dealer.
At that time, Acosta also admitted to signing AC's name on the
replacement form and accompanying documents. . .
In accordance with the terms of the AWC, FINRA imposed upon Acosta a Bar from associating with any FINRA member firm in any capacity.
Bill Singer's Comment
Call me a stickler for detail but what the hell does it mean to cause someone to impersonate another person? More to the point, why aren't the elements of causing the cited impersonation spelled out in the AWC? And while we're trying to flesh out the AWC, why not raise a few more questions:
Did Acosta pay someone to impersonate customer AC?
Was Customer AC aware that someone would impersonate him?
Were there any facts that indicated that the "other" broker-dealer was wrongfully delaying the account transfer and Acosta had become frustrated?
No . . . you're right and I'm not arguing the point . . . a lot of my questions and reservations only go to the issue of mitigation and not exculpation. Acosta did wrong. But it may well have been guilty with an explanation. Maybe not an explanation that would have earned her a free pass but possibly one that may have moved the needle from Bar to a lesser suspension. Note that the AWC concedes that the four signings of AC's name by Acosta were undertaken with the customer's knowledge and authorization. Unfortunately, Acosta apparently lied to FINRA not once but twice before she finally admitted to the allegations. Lying to regulators often eliminates the best arguments in mitigation.
I don't see any indication on the AWC that Acosta was represented by a lawyer during her interactions with FINRA or with the execution of the settlement document. Maybe a bit of professional help might have altered the arc of interactions with FINRA and, thereafter, her industry career.