Blank Checks From Elderly Couple Checkmate Stockbroker's Career

October 30, 2015

It's a growing phenomenon and a stomach-turning problem: senior citizens being targeted by scamsters and fraudsters.  The victims may be your grandparents or parents -- or they could be family members of friends. Whatever the case, be aware of the warning signs. A recent FINRA regulatory settlement presents us with a troubling fact pattern in which an elderly couple seem to have been taken advantage of by their stockbroker.

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, Anthony C. Gray submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In the Matter of Anthony C. Gray, Respondent (AWC  2015047279101, October 21, 2015).

Gray first entered the securities industry in July 2012 and by July 2013 was registered with FINRA member firm Edward Jones, where he remained until his October 8, 2015, termination.

The Elderly Couple

The AWC asserts that in December 2013, Gray convinced an elderly couple to transfer funds from their Edward Jones account to their personal banking account, which was at an institution other than the brokerage firm.  Gray allegedly offered to handle the payment of Edward Jones fees and, in furtherance of that purported proposal, he instructed the couple to give him blank checks from their away banking account. 

Blanking Out

The AWC alleges that over a two-year period, Gray made the blank checks payable in the gross amount of about $138,000 to himself or a business with which he was affiliated for what the AWC characterizes as "his personal use."

As set forth in FINRA's online BrokerCheck recordsas of October 30, 2015, Edward Jones "Discharged" Gray on September 24, 2015, based upon allegations that:

Mr. Gray admitted asking two senior clients (husband and wife) to transfer funds from their Edward Jones account to their personal bank account, sign checks in blank from the bank account and give the checks to him. Mr. Gray then made the checks payable to himself and deposited them in his personal bank account. The misappropriation totaled approximately $138,000

In accordance with the terms of the AWC, FINRA imposed upon Gray a Bar in all capacities from associating with any FINRA member firm.
October 27, 2015: Not that long ago there were 6,000 broker/dealers registered with FINRA. Now there are 4,000. Is there a future for the small and mid-sized broker/dealer? Bill Singer speaks to Martin Kaplan, partner with Gusrae Kaplan Nusbaum, on the current "draconian" regulatory environment under the Financial Industry Regulatory Authority. FINRA values "putting notches on the regulatory belt and extracting large amounts of money from firms that can least afford it," he says. Kaplan argues for a regulatory regime that assists broker/dealers in complying with the law, as opposed to the "inquisition-like" pursuit of small, unintended violations of burdensome codes. "It is a system that is troubled when you have to balance your budget by fining your members," he says. WATCH