June 26, 2020

If you're trying not to draw attention to yourself, DON'T SEND MESSAGES IN UPPER CASE and DON'T SEND MESSAGES IN UPPER CASE WITH THREE EXCLAMATION POINTS!!! If you follow those two basic rules, you may avoid calling attention to yourself. If you opt to go for the all caps and the multiple exclamation points, you will likely succeed in creating a flashing neon sign replete with bells and whistles. 

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, James Van Ham submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In the Matter of James Van Ham, Respondent (FINRA AWC 2018059249501)

The AWC alleges that James Van Ham was first registered in 1983, and between April 2015 and July 2018, he was regsitered with FINRA member firm O.N. Equity Sales Company. The AWC alleges that Luna "does not have any disciplinary history with the Securities and Exchange Commission, any state securities regulators, FINRA, or any other self-regulatory organization." 

2018 Annuity Swap

The AWC alleges that in May 2018, Van Ham submitted to O. N. Equity Sales Company a proposed annuity exchange whereby a customer's five-year-old variable annuity would be exchanged for a fixed indexed annuity. Citing "suitability" issues, the firm refused to approve the exchange. 

SIDE BAR: The AWC introduces us to the customer at issue via the description: "his senior customer" (the "his" referencing Van Ham). I'm not sure what to make of the "his" -- as in, what, each broker in the office had "his" or "her" own senior customer? Was there some kind of quota system? Then there's the whole moniker of the "senior" customer. Senior citizen I get. Elderly I get. It's the Senior Customer that I'm not quite getting. Is FINRA suggesting that in addition to a quota system, O.N. Equity Sales Company had apportioned its customers into three classes: Freshman, Sophomore, Junior, and Senior? Was the breakdown for each class something like 0 to 2 years, 2 years to 4 years, 4 years to 6 years, and then the vaunted "Senior" status for accounts that remained with their servicing broker for over 6 years? Frankly, if FINRA's going to make a big deal about a transaction involving a given customer, I'd sort of like a tad more precision than "his senior customer."

Ham Seeks Assistance

After his firm's denial of the annuity swap, Van Ham took what strikes me as some nonsensical steps. As the AWC states:

On June 27, 2018, Van Ham sent an email from his unapproved personal email account to a person not associated with the Firm, seeking assistance to process the transaction away from the Firm. Van Ham's email warned, "PLEASE DO NOT CONTACT ME ABOUT THIS CASE THROUGH MY [Firm] E-MAIL ACCOUNT!!! PLEASE USE MY CELL OR THIS PRIVATE E-MAIL ADDRESS!!!" Van Ham purposely circumvented the Firm's supervisory procedures in an effort to effect an annuity exchange that O.N. Equity had already rejected as unsuitable. The exchange did not occur. 

Working through Van Ham's conduct, he sends an email from an unapproved account in which he "yells" at the top of his lungs via upper case letters and three exclamation points. SERIOUSLY!!!??? And despite all of this, the AWC asserts that the "exchange did not occur." 

SIDE BAR:The use by Van Ham of his unapproved personal email account I get. The sending of such an email to a person not associated with the Firm, seeking assistance to process the transaction away from the Firm, I don't get. 

A person not associated with the Firm -- as in, what, the entire world other than folks associated at O.N. Equity Sales Company? Why didn't FINRA offer some meaningful details about the identity of that not-associated person, something like: an insurance agent or clerk at another insurance firm. 

Finally, given that FINRA charged Van Ham with misconduct, ya think y'all might use just a bit more fancy, legal-type language to explain just what the hell kind of "assistance" that Van Ham was seeking from that man or woman of not-associated mystery?


All of which brings us to the piece de resistance of this AWC: 


On top of looking like he is trying to hide something, Van Ham manages to come off as somewhat of a clown because he didn't hide what he was trying to hide and his UPPER CAPS and !!! drew attention to his foolish efforts. Then, Van Ham blew up his chances of defending himself against a charge that the annuity swap was well-intentioned after he sent an unauthorized email using ALL CAPS and !!! with language that clearly indicates that he knew that he was trying to hide something because he avoided using his firm's authorized email account and instructed the "person not associated with the Firm" to surreptitiously contact him at "MY CELL OR THIS PRIVATE E-MAIL ADDRESS." 


The AWC alleges that:

[O]n July 19, 2018, O.N. Equity terminated Van Ham's registration after it "uncovered an email sent from an email address other than the registered representative's approved email address... that appeared to be designed to avoid the firm's email archiving, maintenance and review systems.

FINRA Sanctions

Having found that Van Ham violated FINRA Rule 2010, FINRA imposed upon him a $5,000 fine and a two-month suspension from association with any FINRA member firm in all capacities.