At its best, remorse demonstrates a pang of conscience. At its worst, it may arise only in anticipation that you are about to get caught. Contrition and regret are two very different things. As such, we're often caught up in the ambivalence of the moment when we consider the motivation behind someone's renunciation of a crime or fraud. Were the remedial steps prompted by a guilty conscience or the malefactor's sense that someone's hot on his trail? In a recent FINRA regulatory settlement we have all the classic elements of such puzzle.
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, Colin Woolford submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In the Matter of Colin Woolford, Respondent (FINRA AWC 2019064465201)
The AWC asserts that Woolford entered the industry in 2015 and was first registered in 2016 with Barclays Capital, Inc. The AWC alleges that Woolford "does not have any relevant disciplinary history."
The Corporate Card
The AWC alleges that:
FINRA Rule 2010 requires associated persons in the conduct of their business to observe
high standards of commercial honor and just and equitable principles of trade. Submitting
personal expenses as business expenses and receiving reimbursement violates Rule 2010.
From January 2018 through June 2019, Woolford used a corporate card issued to him by
Barclays for numerous personal expenses; he submitted for reimbursement 164 personal
expenses, primarily Uber and taxi costs, and was reimbursed $8,202.13 in violation of
firm policy. In July 2019, prior to detection by anyone at the firm, Woolford self-reported
to his supervisors at Barclays that he had submitted personal expenses for reimbursement
as business expenses. Woolford volunteered to repay the firm all wrongfully obtained
reimbursements, and he fully cooperated with the firm's subsequent internal
investigation. At the time Woolford self-reported, Barclays did not suspect that he had
violated the firm's travel and expense policies. Upon completing its investigation and
receiving full reimbursement from Woolford, Barclays terminated him.
= = = = =
Footnote 1: In determining the sanction in this matter, FINRA took into account Woolford's self-reporting of his actions and
his reimbursement of the firm
Online FINRA BrokerCheck records as of April 6, 2021, disclose that Barclays Capital "discharged" Woolford on October 1, 2019, based upon:
Allegations that the representative submitted personal expenses for payment by
the firm and included inaccurate information about some expenses. The
representative subsequently self-reported the existence of some of the inaccurate
personal expenses and fully cooperated and agreed to pay the personal expenses. No customer trading was involved.
In accordance with the terms of the AWC, FINRA imposed upon Woolford a $5,000 fine and a three-month suspension from associating with any FINRA member in all capacities.
Bill Singer's Comment
Okay, upfront, there's no question that Woolford submitted paperwork to Barclays whereby he was wrongly reimbursed for personal expenses that were presented to his employer as covered business expenses. I'm not going to sugarcoat that or try to excuse his behavior. Having noted my disapproval of Woolford's cited conduct, I want to make it clear that I appreciate his remorse, which not only took the form of self-reporting but also included reimbursement. Pointedly, Woolford self-reported his wrongful reimbursement efforts in "July 2019, prior to detection by anyone at the firm . . . "
Presently, it's April 2021 -- so FINRA is only now getting around to sanctioning misconduct that occurred, at best, about 21 months ago (June 2019), or, at worst, 38 months ago (January 2018). Making matters even less impressive for FINRA, Woolford self-reported in July 2019 and Barclay's fired him in October 2019. Just what the hell took FINRA so long to settle this case? Frankly, the fine and suspension are so far removed from the underlying events that they don't seem able of accomplishing any so-called "remedial" goals.
The attorney of record on the AWC is David E. Robbins, Kaufmann Gildin & Robbins LLP https://www.securitieslosses.com/attorney/david-e-robbins/, as deft a veteran practitioner as Wall Street has ever known. It's no small wonder that Woolford seems to have been counseled to make the best of a bad situation, and, it likely follows, that FINRA appreciated Robbins' role as counsel.