If it wasn't for stupidity, lawyers would have nothing to do for a living. Take today's featured FINRA regulatory settlement. We got a Wall Street veteran with over a decade of experience. Looks like she built a decent enough career. She was registered with a broker-dealer and also handling some insurance biz. Then the stupid kicked in. 132 automobile trips. 41 expense reports. Apparently, all of said rides were fictitious but, hey, why not submit reimbursement for the business expenses anyway, right? Stupid is as stupid does.
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, Brenda M. Kochel submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In the Matter of Brenda M. Kochel, Respondent (FINRA AWC 2018059546401)
Kochel was first registered in 2006 and by March 2015, she was registered with FINRA member firm Park Avenue Securities LLC, where she was also employed by the firm's affiliated insurance company; both organizations share the same parent: Guardian Life Insurance Company of America ("Guardian"). The AWC asserts that Kochel "does not have any disciplinary history with the Securities and Exchange
Commission, any state securities regulators, FINRA, or any other self-regulatory
The Day Tripper
The AWC asserts that during the relevant period from November 2016 through May 2018, Kochel had requested via 41 expense reports, $23,847.24 in reimbursement from Guardian for 132 automobile trips. Under Guardian's policies, employees were entitled to reimbursement for automobile usage incurred during business-related travel. As set forth in part in the AWC:
trip on each expense report, Kochel identified locations she claimed to have driven from
and driven to, and identified amounts of personal car usage expenses she claimed to have
incurred on those trips. These were fictitious; she did not take such trips or incur such
Kochel's supervisor provided her with his log-in credentials to Guardian's expense
reimbursement system so that she could approve the expense reimbursement requests of
his team members. Without her supervisor's knowledge, Kochel used his log-in
credentials to approve the reimbursement of her fictitious expenses. Through her actions,
Kochel obtained $23,847.24 that she was not entitled to receive.
Online FINRA BrokerCheck records as of August 21, 2019, disclose that FINRA member firm Park Avenue Securities "discharged" Kochel on July 19, 2018, based upon allegations of:
Misappropriation of Company funds (no client funds involved, not investment related). Submitted false expenses through Company's expense reimbursement system.
FINRA deemed Kochel's cited misconduct as constituting a violation of FINRA Rule 2010. In accordance with the terms of the AWC, FINRA imposed upon Kochel a Bar from association with any FINRA member firm in any capacity.
Bill Singer's Comment
Good riddance! At least it gave me a chance to post a batch of music videos.