FINRA Tells Stockbroker He's Through After Firm Pays His Bills

September 12, 2016

Grandeur plays well on the big screen and on the pages of many a novel, but, in truth, it is often nothing more than a little stumble that sends us careening off the path, into the ditch, and over the cliff. Reputations, careers, and lives are often destroyed by acts of silly stupidity and outright nonsense. In a recent regulatory settlement, we witness the devastation of a trifling decision to fob off personal expenses as business ones. If you listen carefully, in the background, you can hear Destiny's Child singing.

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, Respondent submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In the Matter of [NAME REDACTED BY], Respondent (AWC 2016048897101, August 29, 2016).

The AWC asserts that from July 2014 to February 2016, Respondent was a systems analyst (with no securities licenses) for National Financial Services LLC ("NFS"). Among Respondent's duties were to analyze and contribute to the design and architecture of the firm's operational systems. 

Can You Pay My Bills?

NFS had issued to Respondent  a joint-liability credit card on which the firm was responsible for business expenses and he was responsible for personal charges. The AWC alleges that Respondent failed to respond to email reminders about some $3,726 in outstanding charges on the card that were made between March and October 2015.  In apparent response to Respondent 's inaction, NFS questioned those charges. 

Purportedly attempting to wrongly avoid responsibility for some of the questioned charges, Respondent  told NFS and the credit card issuer that $1,898 of the charges were fraudulent, and he also falsely labeled another $1,062 of the charges as "business related." After being confronted by NFS with evidence that, in fact, he had made the charges and that they were not business related, Respondent  allegedly admitted that the charges were neither fraudulent nor business related. 

You And Me Are Through

The AWC explains that the $3,726 in questioned charges was reduced to $2,960 after Respondent paid $391 directly to the credit card issuer and NFS deducted $375 from his paycheck prior to his February 2016 termination. Respondent  did not make any further payments against the remaining $2,960 in charges, which NFS paid. 

The AWC notes that:

Charging personal expenses to a firm-issued credit card and then falsely claiming that the charges were fraudulent or business related to avoid responsibility for paying those expenses constitutes conversion. Therefore, by charging personal expenses to his corporate credit card and falsely disputing the charges as fraudulent or claiming they were business related, [NAME REDACTED by the Blog] converted approximately $2,960 in violation of FINRA Rule 2010

In accordance with the terms of the AWC, FINRA imposed upon Respondent  a Bar from associating with any FINRA member in all capacities.