The Broker, His Wife, And Her Roth IRA

November 6, 2013

The wife had a Roth Individual Retirement Account. The husband didn't quite get the concept of who was the "I" in his wife's IRA.  In the end, the wife's Roth IRA was a tad lighter and the marriage, well, that was worse for the wear.

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, Victor R. Amakwe submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In the Matter of Victor R. Amakwe, Respondent (AWC 2011030473001, October 30, 2013).

Amakwe entered the securities industry in 2004 with FINRA member firm Fidelity Brokerage Services LLC, where he remained until he was permitted to resign in November 2011. The AWC asserts that he had no prior disciplinary history in the securities industry.

Opening The Roth IRA

In February 2010, Amakwe's wife opened a Roth IRA at Fidelity; however, Amakwe was not an owner or signatory on the account, and he did not have Fidelity's prior written approval to trade in, or withdraw funds from, the account. The AWC alleges that Amakwe's wife intended to preserve the funds in her Roth IRA account for retirement

Marital Bliss?

On five separate occasions from December 2010 to May 2011, Amakwe allegedly used his wife's password to access her Roth IRA account; and, having gained access to the account, he then liquidated funds and transferred $16,030 to the couple's Fidelity joint brokerage account. 

Thereafter, the AWC asserts that Amakwe used the funds for various personal and joint expenses, including to purchase and repair a Mercedes, which he currently owns and uses, and to pay for personal legal expenses. The AWC alleges that Amakwe's conduct constituted violations of FINRA Rule 2150(a) and 2010.

What's Mine Is Yours?

According to online FINRA documents as of November 6, 2013, Fidelity permitted Amakwe to resign on November 15, 2011, based upon allegations that:


In December 2011,  Amakwe and his wife divorced, and as of the date of the AWC, FINRA alleges that he had never repaid the transferred funds. 

FINRA Withdrawal

In accordance with the terms of the AWC, FINRA imposed upon Amakwe a $5,000 fine and a two-year suspension from association with any member of FINRA in any capacity.

Bill Singer's Comment

One minor criticism with the AWC in this matter -- at best, a quibble. As published, the regulatory document contains the following sentence:

In February 2010, Amakwe's wife, TD, opened a Roth IRA account with Amakwe at Fidelity.

The wife's opening the account "with Amakwe at Fidelity" is just a tad too colloquial for the import of a published regulatory settlement. Such an allegation is amenable to several interpretations; for example:
  • the wife opened the account in a joint name with her husband (which would be an odd, if not impossible, situation for an "individual" retirement account);
  • the husband, acting in his capacity as a registered person, handled the paperwork for opening the account and received credit for the transaction; or
  • the wife appeared at the Fidelity office accompanied by her husband but she opened the account in her own name.
Like I said, not a huge lack of precision but something that should at least be noted for future publications by FINRA.

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