Ten Years After Was A Rock Band And FINRA Felony Violation

October 31, 2013

Once upon a time, there was a rock band known as Ten Years After, among whose members was legendary guitarist Alvin Lee, who sadly died earlier this year.  One of my favorite hits from that band was I'd Love To Change The Word. Readers of the BrokeAndBroker Blog know that I've adopted the band's song as my mantra -- albeit one that has yet to yield any meaningful results. What's that all got to do with Wall Street regulation?  Well, today's column involves a registered person who sort of forgot to disclose a ten-year-old felony charge and ten years after that event, she finds herself in a world that she would likely want to change. 

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, Marla Lindsay submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In the Matter of Marla Lindsay, Respondent (AWC 2013035725401, October 25, 2013).

In April 2003, Lindsay was arrested and charged in North Carolina with felony embezzlement, apparently as a result of some conduct that she had engaged in while working as a salesperson in the electronics department of a department store. Pursuant to a Deferred Prosecution Program, Lindsay served six months of probation, performed 50 hours of community service, and paid $1,000 in restitution and $50 in fees. After Lindsay completed the Deferred Prosecution Program  the charge against her was dismissed in September 2003.

On December 20, 2012, Lindsay became an associated person with Lincoln Financial Advisors Corporation and pursuant to her attempt to become registered submitted a signed Uniform Application For Securities Industry Registration Or Transfer ("Form U4")  which Lincoln filed with FINRA on January 10, 2013. The AWC asserts that Lindsay had no prior disciplinary history in the securities industry.

Not So Complete

In response to Form U4 Question 12, which asked for "complete employment history for the past 10 years," Lindsay inaccurately reported that she was ''unemployed" from February 2002 to January 2004. In fact, the AWC asserts that she had been employed in 2002 and 2003 at the department store referenced in 2003 felony.

Not Charged Up

Form U4 Question 14A(1)(b) asks: "Have you ever been charged with any felony?" The AWC asserts that Lindsay inaccurately responded "no," notwithstanding the 2003 felony charge.

The Costs

On January 25, 2013, Lincoln filed a Uniform Termination Notice for Securities Industry Registration ("Form U5") terminating Lindsay. 

The AWC asserts that Lindsay's failure to disclose the 2003 felony charge and her accurate employment history constituted violations of Article V, Section 2 of the FINRA By-Laws and FINRA Rules 1122 and 2010.  In accordance with the terms of the AWC, FINRA imposed upon Lindsay a $5,000 fine and a one-month suspension from association with any member of FINRA in any capacity.

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