PhD Stockbroker Fined And Suspended For Dubious Degree

September 28, 2012

View of the doctorate certificate of Albert Ei...

Doctorate certificate of Albert Einstein from the University of Zurich (Image credit: AFP/Getty Images via @daylife)

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 Joseph Eanell submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In the Matter of Robert Joseph Eanell, Respondent (AWC, 2011028386201, September 19, 2012).

Eanell first became registered in 1996 and from June 2004 through August 17, 2012, he was registered with Sterling Enterprises Group, Inc.

NOTE: The AWC erroneously states "From June 10, 1994 through August 17, 2012, Eanell was registered in that same capacity through member firm Sterling Enterprises Group, Inc."  According to online FINRA regulatory documents effective as of September 28, 2012, Eanell  was registered with AXA Advisors, Inc. from 1996 to 2000 and then with GunnAllen Financial, Inc. from June 2000 to June 2004.

 The AWC asserts that Eanell has no prior FINRA disciplinary history.

A Matter Of Degree

The AWC asserts that in late 1998, Eanell obtained a "doctoral degree" from an unaccredited distance learning school - a school closed in 2000 by the State of California for issuing graduate degrees based primarily on a student's "life experiences" rather than academic accomplishments. The AWC states that California does not recognize the legitimacy of any graduate degrees that this now closed school conferred after 1997.

During the relevant period from January 2007 through December 2011, Eanell allegedly had identified himself as a "PhD" on his business card and frequently referred to himself as "Doctor Eanell."  Moreover, during the relevant period, Eanell allegedly misrepresented to prospective securities customers that he held a doctoral degree from either the University of California, Los Angeles ("UCLA") or Stanford University.  In fact, Eanell did not hold a doctoral degree from UCLA or Stanford or, for that matter, from any accredited educational institution.

Finally, the  AWC alleges that during the relevant period, Eanell was asked on various annual brokerage firm forms to identify all degrees, titles, and designations that he had used on letterhead, business cards, or other client communications - apparently he did not disclose a PhD or any doctoral degree on those annual responses.

FINRA's Thesis

FINRA deemed Eanell to have misrepresented his doctoral degree in violation of NASD Conduct Rule 2110 (for conduct before December 15, 2008) and FINRA Rule 2010 (for conduct after December 14, 2008); and in accordance with the terms of the AWC, imposed upon Eanell a $7,500 fine and a 30 business-day suspension from association with any FINRA member in any capacity.

Bill Singer's Comment

Hmmmm … an interesting regulatory case that involves the edgy question of how to determine what is a bona fide credential and just who gets to make that call.

In FINRA Notice to Members 11-52 (November 2011): FINRA Reminds Firms of Their Obligations Regarding the Supervision of Registered Persons Using Senior Designations, the self-regulatory organization notes:

NASD Rule 2210 and NYSE 472 prohibit firms and registered persons from making false, exaggerated, unwarranted or misleading statements or claims in communications with the public. This prohibition includes referencing nonexistent or self-conferred degrees or designations or referencing legitimate degrees or designations in a misleading manner. Firms therefore must have adequate supervisory procedures in place to ensure that their registered persons do not violate this requirement. . .

Clearly, Eanell should not have claimed to have had a doctoral degree from UCLA or Stanford.  That was a lie and FINRA was correct in citing those misrepresentations.  On the other hand, using FINRA's guidance of not referencing degrees that are "nonexistent" or "self-conferred," I don't think that necessarily applies to a degree awarded by a subsequently deemed unaccredited institution, even if awarded for life's work rather than academic accomplishment.  Moreover, assuming that Eanell earned a PhD, even one of dubious merit, I'm not sure that he referenced his degree in a "misleading manner" by simply noting its existence on his business card as a "PhD."

Now, puhlease, don't misunderstand my musings.

I am fed up with our over-credentialed society and the indefensible cost of higher education.  Similarly, it is unacceptable for folks to purchase diplomas from online mills (many of which keep sending me emails from China) or to pretend that an "honorary" degree is the same as one earned through rigorous application. That clear enough for y'all?

That being said, what about all the idiotic and overblown titles Wall Streetbestows upon stockbrokers? As I noted in End of An Error: Wirehouses, Financial Supermarkets, and Wall Street's Missteps ("Street Sweeper" February 17, 2012):

Too Many Titles

First and foremost, I call for the professionalizing of the role of all individuals providing financial services. It has all gotten too confusing for the average investor (and apparently for the befuddled regulators). We are amid an explosion of titles that suggests that all financial-service providers are well-trained and educated (and of similar expertise) to understand what they are recommending to investors. As recent history has sadly demonstrated, there are far too many con artists, fraudsters, scamsters and financial morons out there masquerading as know-it-alls.

Open a newspaper or magazine, plow through online research or listen to those touchy-feely TV commercials, and you are immediately bombarded with titles: stockbroker, registered representative, financial planner, investment adviser, account manager, financial representative, financial associate. Some of those titles are real, but others are fanciful. We don't need fanciful in this day and age.  And we certainly need less confusion when trying to invest our savings or arrange for our old age…

As an industry veteran, I know what some of the job descriptions mean but many in the public can't make heads or tails out of that hodgepodge; and, did you ever get cold called by anyone who wasn't some variation of a vice president or director?  When will FINRA do something about the proliferation of so many confusing titles on business cards?Then there's the other intriguing question embedded in this FINRA case: Did or didn't Eanell receive a doctorate?

If he did, then who the hell cares whether the State of California or any other state recognizes so-called distance learning schools or whether the school is accredited or not?  What happens if the State of California doesn't recognize the degree from the University of Get A Degree Online Cheap but five other states do? What if the degree were conferred by a foreign institution - now you're getting into that whole mess about U.S. medical degrees and those obtained offshore. And what about all the recent complaints about tuition-loan mills and relatively useless online universities - where and who is drawing the line there?

Education is no longer merely about academia but has become big business.  Sanctimonious industry regulators might want to take a gander at the stock symbols for Corinthian Colleges, Inc.,  Apollo Group, Inc., DeVry Institutes, and ITT Educational Services, Inc. before launching a holy war against online degrees or those awarded by non-traditional institutions.  I appreciate that the issue in Eanell is about a degree awarded by an unaccredited institution based upon "life experiences," but who at FINRA is also reconciling that position with recent revelations about widespread cheating at Harvard? See, for example, "Why Harvard Mishandled Its Cheating Scandal" (, Richard Levick, September 6, 2012).Wall Street con artists get away with far worse than having a bogus or dubious PhD on their business cards, and many of those folks don't get hit with $7,500 fines or 30-business-day suspensions.  I sure as hell hope that FINRA didn't divert too much time and staff from more pressing matters to investigate and prosecute Dr. Eanell.

By the way, when will FINRA be going after all those Kentucky Colonels and mail-order ministers?