FINRA Says He Who Smelt It Dealt It

August 21, 2013

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, Russell L. Peace submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In the Matter of Russell L. Peace, Respondent (AWC 2012034828101, August 15, 2013).

Peace entered the securities industry in 2007 with NYLife Securities, LLC and first became registered in 2008. The AWC asserts that Peace had no prior relevant disciplinary history.

Outside Business Activity

Following his relocation in March 2011 from Tucson to Globe, AZ, Peace requested permission to work from what the AWC characterizes as a NYL "detached branch office" in Globe, and the firm approved.

In June 2011, Peace allegedly began working some 36 to 40 hours per week as a compensated smelter operator trainee for mining company MCG. While working for MCG, the AWC asserts that Peace continued to receive NYL health and dental benefits through January 2012; and he also received small first-year and renewal commissions through 2012. 
The AWC alleges that Peace failed to inform NYL of his MCG employment.  

Around July 2012, NYL became aware of Peace's MCG employment and on October 26, 2012, terminated him for violating company policy by engaging in an undisclosed and unapproved outside business activity ("OBA"). The AWC characterizes Peace's OBA as in violation of FINRA Rules 3270 and 2010.

SIDE BAR:  There is no explanation provided in the AWC as to the three month delay between NYL learning of Peace's OBA and its decision to terminate him.

FINRA Mines For Answers

Following NYL's filing of Peace's Uniform Termination Notice For Securities Industry Registration (Form U5) on November 20, 2012, FINRA sent four requests for information concerning the issues raised above to Peace from December 2012 through April 2013, but he failed to respond until July 16, 2013.  The AWC does not explain the nature or extent of that belated response beyond citing a FINRA Rule 8210 and 2010 violation.

A Costly Strike

In accordance with the terms of the AWC, FINRA imposed upon Peace a $5,000 fine and a 9-month suspension from associating with a FINRA member in any capacity. 

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