Stockbroker Pleads To Misdemeanor But Fails To Disclose Felony Charge

September 17, 2015

You got caught and were charged with a felony. As a registered representative on Wall Street, if you're convicted of a felony or certain misdemeanors, it could mark the end of your career. Troubled by losing your livelihood, you hire a lawyer. Thankfully, after some gut-wrenching times, your lawyer gives you the good news that he cut a plea bargain and you're going to be able to plead to a misdemeanor that doesn't expose you to statutory disqualification. You dodged a mortar shell. Or did you?

You know how distracted and worried you were for all the months leading up to that wonderful settlement? Did you ever bother to notify your firm that you had been charged with a felony? Did you ever bother to update your Form U4? Guess what: Your troubles aren't over!

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, Michael J. Glodzik submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In the Matter of Michael J. Glodzik, Respondent (AWC  # 2014041944101, September 3, 2015).

Glodzik was first registered in 2003 and, thereafter, was registered with several FINRA member firms, of which includes Sterne Agee Financial Services, Inc. (January 2010 to December 2011) and Dalton Strategic Investment Services, Inc. (August 2013 to July 2014). the AWC asserts that Glodzik had no prior disciplinary history.

Class C Felony Charge 

The AWC asserts that while registered with Sterne Agee in May 2011, Glodzik was charged with violating §220.09 of the New York State Penal Code: criminal possession of a
controlled substance in the fourth degree, a Class C felony. 

Class A Misdemeanor Plea

The AWC concedes that court records reflect the dismissal of the felony charge as a result of Glodzik's plea to the misdemeanor of  in violation of §220.03 of the New York State Penal Code: criminal possession of a controlled substance in the seventh degree, a Class A misdemeanor. 

By The Book

FINRA By-Laws Article V, Section 2(c): applications for registration must be kept current at all times and amendments must be filed within 30 days of learning facts or circumstances giving rise to the amendment.

FINRA Rule 1122: prohibits associated persons from filing information that is incomplete or inaccurate or failing to amend an incomplete or inaccurate filing after receiving notice of the need for the amendment.

The Uniform Application for Securities Industry Registration or Transfer ('Form U4") Questions 14A(1) and 14B(1) : require registered representatives to disclose any conviction or charge of a felony or of certain specified misdemeanors (among which are the wrongful taking of property). 

FINRA Rule 2010: registered representatives shall observe high standards of commercial honor and just and equitable principles of trade.

Disclosure Violations

Glodzik failed to disclose the felony charge on his Form U4 within 30 days of learning of the charge during his tenure with both Sterne Agee and Dalton Strategic. He first disclosed the felony charge on his Form U4 when he became registered with another member firm in July 2014. FINRA deemed Glodzik's conduct to constitute violaionts of FINRA Rules 1122 and 2010 and Article V, Section 2(c) of the FINRA By-Laws.

In accordance with the terms of the AWC, FINRA imposed upon Glodzik a $5,000 fine and a 30-calendar-day suspension from association with any FINRA member firm in any capacity.