September 6, 2019
Temptation is always there. It's how we respond to the siren's call that matters. In today's FINRA disciplinary settlement, we have the local head of a national organization, which, among other things, promotes ethical conduct among its members. We also have a debit card issued by that organization to said executive. As is the fact pattern with these tales of woe, the executive used the card to pay personal expenses but never timely reimbursed the organization. Worse, as is frequently the case, the inappropriate expenses amounted to peanuts.
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, Lawrence James Rizer, submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In the Matter of Lawrence James Rizer Respondent (FINRA AWC 2017054157401)
The AWC asserts that Rizer was first registered in 1983, was not registered from 1994 to January 2003, and, in July 2003, he was registered with FINRA member firm NYLIFE Securities LLC. The AWC asserts that Rizer "has no relevant disciplinary history."
The AWC alleges that during the relevant period of May 2016 to October 2016, Rizer was was President of a local chapter of the National Association of Insurance and
Financial Advisors ("NAIFA"), which purportedly had a mission statement setting forth its purpose as to "advocate for a positive legislative and regulatory environment, enhance business and professional skills, and promote the ethical conduct" of its insurance and financial advisors members. The AWC concedes that Rizer had disclosed this affiliation to NYLIFE as an Outside Business Activity ("OBA").
During the relevant period, the AWC alleges that Rizer used a debit card issued to him by NAIFA to pay for $1,979 in personal expenses
unrelated to his work for NAIFA. The AWC asserts that the debit card was explicitly issued to Rizer "for expenses incurred while recruiting new members," and, as such, Rizer improperly used the debit card to pay his personal, non-business-related expenses. Further, the AWC asserts that during the relevant period, Rizer never even attempted to reimburse NAIFA for the cited charges.
Online FINRA BrokerCheck records as of September 6, 2019, disclose that NYLIFE "discharged" Rizer on April 6, 2017, based upon allegations that:
Mr. Rizer was terminated after he admitted to misusing funds of the National Association of Insurance and Financial Advisors ("NAIFA") totaling $1,979 for his personal use while acting in the capacity of President of a local NAIFA Association in Ohio. Mr. Rizer has reimbursed all funds to NAIFA. NAIFA is not affiliated with New York Life and there is no indication the activity involved any New York Life customers or products.
In accordance with the terms of the AWC, FINRA imposed upon Rizer a Bar from associating with any FINRA member in any capacity.
Bill Singer's Comment
$1,979 -- not even two grand, and Rizer blew up his career over that paltry sum. Yes, Rizer reimbursed NAIFA for every penny at issue but, to some extent, that's sort of like pulling out the knife after you've stabbed someone. Let this be a warning to the unwise.