FINRA Took Wells Fargo Stockbroker Outback to a Bar and SEC Says It's The Last Round

June 1, 2023

A former Wells Fargo Clearing Services, LLC registered representative attempted to pay $3,800 to purchase an Outback Bowl VIP Club Membership, which included tickets for the New Year's Day 2016 game. By the end of 2016, the Respondent stockbroker was terminated for allegedly submitting expenses for reimbursement that were either not business related or not paid by her. In 2019, FINRA's OHO barred the stockbroker; and, after an appeal, in 2022, FINRA's NAC affirmed. Now, in 2023, the SEC rules on her appeal. 
Nancy Kimball Mellon entered the securities industry in 1983, and by August 2012, she was registered with FINRA member firm Wells Fargo Clearing Services, LLC, where she remained until her December 7, 2016, termination.
FINRA Department of Enforcement, Complainant, v. Nancy Kimball Mellon, Respondent (FINRA Office of Hearing Officers ("OHO") Hearing Panel Decision, Discip. Proc. No. 2017052760001 / July 11, 2019)
In 2016, Wells Fargo operated the Concur system, which allowed employees to submit out-of-pocket paid business expenses for direct company reimbursement. Also, Wells Fargo maintained the Financial Advisor Expense Management System ("FAEMS"), which utilized a reimbursement process that used a flexible spending account funded by an employee's pre-tax dollars from their compensation (on a calendar year basis, unspent FAEMS funds were forfeited). Mellon had arranged for Wells Fargo to deduct $20,000 per year/ $1,667 per month in pre-tax dollars to fund her FAEMS account.
Friend and Customer "RL"
A friend and Wells Fargo customer of Mellon's ("RL") served on the Board of Directors of the Outback Bowl, which was held annually in Tampa, Florida. RL suggested that Mellon might want to attend the college football game because it could prove to be a good opportunity to generate new customers. In furtherance of that idea, Mellon agreed to pay $3,800 for an Outback Bowl VIP Club Membership, which included tickets for the New Year's Day 2016 game plus admission to various promotional/networking events. When it came to coughing up the $3,800, Mellon told the Outback Bowl's Director of Sales that [Ed: footnotes omitted]:
she wanted to pay for the membership with a check in 2016 because she had exhausted her 2015 marketing budget. Mellon gave the Director of Sales her credit card information to secure her membership. However, because Mellon did not have an existing relationship with the Outback Bowl, the Outback Bowl also asked RL to personally guarantee Mellon’s payment, and RL did . . .  
Page 3 of the OHO Decision
January 6, 2016 Invoice: $3,800
On January 1, 2016, Mellon showed up at the game with family, current customers, and some prospects. All of which resulted in January 6, 2016, invoice emailed to Mellon for $3,800 "payable on receipt." On that same day, Mellon told the Bowl's Director of Sales that she was awaiting Wells Fargo's funding of her expense account. Thereafter, the following events occurred:
[O]n January 27, the Director of Sales asked Mellon if a check was on the way, noting that the Outback Bowl was about to close its books for 2015. Mellon told him he would get a check shortly but said he had earlier agreed to hold off depositing it until late February. The Director of Sales disputed that he had agreed to hold onto the check, saying that the Outback Bowl deposits checks soon after it receives them. Additionally, Mellon complained to him that she was disappointed by the business networking opportunities at the game because she had met no one at the event. . . .
Page 4 of the OHO Decision
January 27, 2016, FAEMS Submission
Despite not having paid the Outback Bowl invoice, on January 27, 2016, Mellon directed her assistant Mace Maraman, Jr. to submit a $3,800 FAEMS expense, and the filed report included a photocopy of a check dated January 2, 2016, for that amount and drawn on a Bank of Tampa joint account owned by Mellon and her husband. Mellon knew at the time of the submission of the FAEMS report that she had not, in fact, sent the January 2nd check to the Bowl (Maraman purportedly was unaware of the subterfuge). In the absence of an image of the reverse of the check with the endorsement information, FAEMS rejected the expense report. 
March 18, 2016, $3,800 Check to Outback Bowl
On March 17, 2016, RL emailed Mellon that she was "taking real heat" from the Bowl about the unpaid invoice. In response, Mellon informed her friend/customer that she had mailed a check to the Bowl in "early March." As it turned out, Mellon's joint account had been overdrawn for about two months when this latest exchange was going on -- nonetheless, on March 18th, Mellon mailed a $3,800 check to the Bowl, which was received on March 23rd and deposited on March 31st.  
April 4, 2016, Concur Submission
On April 4, 2016, Mellon instructed Maraman to use a copy of the March 18th check as supporting documentation for a Concur reimbursement expense. All well and fine but for the fact that on April 4th, that $3,800 check came bouncing back for insufficient funds. When the Bowl informed Mellon on April 5th that the check has not cleared, her response was "Weird. Will see what [the bank] has done."
April 18, 2016, FAEMS Submission
On April 17, 2016, Mellon's branch manager Tom Stuhlsatz informed her that he had authorized a $500 quarterly out-of-pocket marketing budget, and she should re-submit the Outback Bowl expense report and charge $1,000 of the $3,800 expense to Concur for the first two quarters of 2016. In response, on April 18th [Ed: footnotes omitted]:
[M]ellon instructed Maraman to submit $1,000 in expenses to Concur and the remaining $2,800 to her FAEMS account, as Stuhlsatz had directed. Maraman did so and included copies of the front and back of the $3,800 check with both expense reports. Mellon approved her $2,800 expense submission a few minutes after Maraman entered it into FAEMS. Mellon never told Maraman, or anyone else at Wells Fargo, that her check to the Outback Bowl had bounced. 
Stuhlsatz approved payment of the expenses on April 20. Wells Fargo transferred $1,000 to Mellon’s joint account from the Concur system on April 21. The Firm also  transferred $2,800 from Mellon’s FAEMS account to the joint account between April 25 and June 3. Mellon was thus “reimbursed” $3,800 for expenses she had not actually paid.
Pages 6-7 of the OHO Decision
July 5, 2016, Concur Submission
Some folks just don't know when to stop. In Mellon's case, on July 5, 2016, she instructed Maraman to submit to Concur another $500 marketing expense for her third quarter of coverage and to charge that off against the $3,800 Outback Bowl check, which still had not been honored for payment. Notwithstanding, Stuhlsatz approved the reimbursement and $500 was transferred to Mellon's joint account on July 7th. According to Mellon, this $500 Concur reimbursement was made in error because [Ed: footnotes omitted]:
[S]he “may not have been aware of the ... full allocation of the expense, that the [$3,800] expense had been eaten up.” Mellon said Maraman was responsible for tracking all her expenses because “he held them in queue” and therefore was the one responsible for knowing whether the $3,800 expense already had been submitted and paid by Wells Fargo. When Mellon asked Maraman to submit the $500 expense report, she knew that her check had bounced. 
Including the payment of $500 in July 2016, Wells Fargo transferred $4,300 to Mellon for the expenses she claimed to have incurred for attending the Outback Bowl. 
Page 7 of the OHO Decision
RL Dunned for $3,800
While all of these reimbursement machinations are gong on between Mellon and Wells Fargo, RL is still fending off demands from the Outback Bowl that she pony up her friend's unpaid $3,800. After some back-and-forth between RL and Mellon, which, frankly, was largely deflection by the stockbroker, the point of exasperation was reached [Ed: footnotes omitted]:
In mid-July 2016, the Outback Bowl charged RL’s credit card $3,800. RL emailed Mellon that the Director of Sales’s job “was on the line” as a result of the missing payment and that RL’s relationship with the Outback Bowl had suffered “irreparable harm.” In her email, RL also stated, “I should not have been placed in this position.” RL warned Mellon that if she did not pay her within two weeks she would have to take legal action. 
Within minutes, Mellon responded to RL’s email. She told RL to stop using her Firm email address to communicate with her because the Outback Bowl expense “ha[d] nothing to do with work” and Wells Fargo “did not provide [her] any support or marketing funds.” Mellon added, “I have enough on my plate .... I will do what I can when I can.” Mellon never told RL that Wells Fargo had already paid her $4,300 for the Outback Bowl expense reports. 
On August 2, 2016, RL filed a civil complaint against Mellon in Hillsborough County, Florida, seeking repayment of the $3,800 that she had paid to the Outback Bowl on Mellon’s behalf.   
Page 8 of the OHO Decision
December 7, 2016: Wells Fargo Terminates Mellon
Likely in response to RL's lawsuit, Wells Fargo investigated the underlying allegations and by October 2016, the firm concluded that Mellon had been gaming the reimbursement system and had submitted false expense reports.  Wells Fargo terminated Mellon on December 7, 2016, and submitted a Uniform Termination Notice for Securities Industry Registration (“Form U5”) alleging that she had “submitted expenses for reimbursement that were either not business related or not paid by [Mellon].”  
December 16, 2016: Mellon Pays Outback Bowl
On December 16, 2016, Mellon paid via credit card the Outback Bowl's $3,800 invoice; however, she has not yet repaid the extra $500 she obtained from Wells Fargo.
January 2018: FINRA Investigates
In January 2018, during its investigation of her termination and the underlying allegations, FINRA sent Mellon a FINRA Rule 8210 demand for information about the Outback Bowl expense reports. In part, the demands sought supporting bank account statements, cancelled checks, and wire transfers. Also, FINRA demanded a list of checking and savings accounts she had an interest in from January 1 to October 31, 2016, and for her to provide supporting documentation of same. 
Bank Shots
Upon receipt of FINRA's 8210 demands, Mellon [Ed: footnotes omitted]: 
[M]ellon told the bank, “I need your help. Either a letter deny[ing] the documents or the docs.” In a subsequent email later in the day, she asked, “Wouldn’t it be illegal for [FINRA] to demand [the information] since it is a joint account and [my husband] would not want our laundry aired? [W]ould not that be an appropriate answer by Bank?”
Mellon responded to FINRA’s Rule 8210 request by email on January 12, 2018. She provided a copy of the receipt from the Outback Bowl confirming her payment of $3,800 by credit card in December 2016, but she did not provide copies of monthly bank statements, an explanation of the steps she took to try to get the statements, or correspondence she had with the Bank of Tampa. Rather, Mellon told FINRA that because she did not use a check to pay the Outback Bowl, “the banking document requests seem a bit broad of scope.” The bank statements were unavailable, Mellon said in her email, because “[she] no longer [had] online access, nor ... copies of statements.” Mellon provided no evidence of her efforts to obtain the documents FINRA requested, even though the staff had given her instructions to do so. 
Pages 11-12 of the OHO Decision
By January 18, 2018, FINRA Staff had apparently become exasperated with Mellon's failure to fully and timely respond to document demands. Staff asserted that, in part, the banking records were requested in order to demonstrate whether Wells Fargo had transferred a total of $4,300 in reimbursement, and the transactional history of Mellon's $3,800 check. Mellon apparently decided that she had produced all that she could or would, and conveyed that to the regulator. As such, FINRA Staff [Ed: footnotes omitted]:
asked the Bank of Tampa to provide a letter stating whether it would provide Mellon copies of statements for the joint account and detailing communications it had with her about obtaining account statements. The same day, the bank’s commercial banking officer wrote to FINRA that the bank would provide either account holder of the joint account with copies of bank statements and canceled checks. Therefore, according to the bank, if Mellon asked for “any documentation” about her accounts, it “would provide her with any/all information requested.” It added that the bank “ha[d] not received any requests for account information” from Mellon. The commercial banking officer wrote that Mellon wanted a letter from the bank stating that it could not produce the statements FINRA requested. In response, according to the bank’s letter, the commercial banking officer told Mellon that she should consult an attorney. 
Page 13 of the OHO Decision
November 2018: FINRA Complaint
On November 9, 2018, FINRA filed a Complaint against Mellon alleging Conversion in violation of FINRA Rule 2010; False Expense Reports in violation of FINRA Rule 2010; Causing False Books and Records of the Firm in violation of FINRA Rules 4511 and 2010; and Providing False Information in Response to FINRA Rule 8210 Requests in violation of FINRA Rules 8210 and 2010. FINRA Department of Enforcement, Complainant, v. Nancy Kimball Mellon, Respondent 
(FINRA Complaint, Disc. Proc. No. 2017052760001 / November 9, 2018)
As to the Conversion count, Mellon largely argued that [Ed: footnotes omitted]:
[B]ecause she had incurred other business expenses, which offset the amount she was reimbursed for the Outback Bowl, she did not receive more than she was entitled to. The other business expenses, she claims, exceeded the amount of her $20,000 FAEMS account and the $2,000 branch allowance. She also argues that money from the FAEMS account actually belonged to her because it was funded with contributions from her Wells Fargo compensation. However, an employee forfeits unused FAEMS funds at the end of the year. Even if the Panel were to credit this argument, Mellon also obtained $1,500 of the $4,300 that Wells Fargo paid her from the Concur system, which was funded directly by the branch, not Mellon’s compensation. And even if Mellon incurred other reimbursable expenses, she submitted false reimbursement requests for an expense she did not incur, and she obtained money to which she was not entitled. 
Mellon also argues that she made an “administrative error” involving an “over allocation of an expense,” which “clearly should have been allowed to be corrected internally,” and that she did not act with intent. The Panel disagrees. Mellon acted intentionally when she submitted each of the expense reports. There is no evidence that the reimbursements resulted from the “mis-allocation of expenses” or “administrative errors” caused by Concur, FAEMS, Maraman, or anyone else at Wells Fargo. Mellon made a deliberate decision to deceive Wells Fargo. She knowingly submitted an expense report in January 2016 using a check she had not sent to the Outback Bowl. She again acted deliberately when she submitted two separate expense reports in April 2016—one to Concur (for $1,000) and one to FAEMS (for $2,800)—even though she knew that her check to the Outback Bowl had bounced. She acted intentionally in July 2016 when she asked Maraman to allocate the $500 quarterly branch allowance to the Outback Bowl, an expense she knew she had not paid. 
The Panel also rejects Mellon’s argument that the Firm was intent on getting rid of her, which created an environment of “ill will and toxicity” that prevented her from fixing the expense report “errors.” Based on the evidence presented at the hearing, Wells Fargo was engaged in appropriate supervision of Mellon. In any event, any possible friction between Mellon and Wells Fargo does not excuse her deliberately submitting false expense reports.
Pages 13 - 14 of the OHO Decision 
2019 OHO Panel Findings
Accordingly, the OHO Panel found that Mellon had converted $4,300 from Wells Fargo in violation of FINRA Rule 2010. Further, the OHO Panel also found that Mellon knew that her four expense reports were false because she had not paid the Outback Bowl and her $3,800 check was returned for insufficient funds. The net result of her conduct was to cause Well Fargo to maintain inaccurate books and records in violation of FINRA Rules 4511 and 2010.  Finally, the Panel found that Mellon knew that her requested bank records would show that the joint account had not paid the $3,800 Outback Bowl expense before Wells Fargo reimbursed her for $4,300 is submitted expenses -- and, further, that she knew that the Bank of Tampa was prepared to produce the requested statements.
SIDE BAR: Note that the FINRA OHO Panel Decision indicates that:


For the Complainant: Kathryn M. Wilson, Esq., John F. Guild, Esq., and Tino A. Lisella, Esq., Department of Enforcement, Financial Industry Regulatory Authority.

For the Respondent: Pro se.
FINRA Sanctions
On July 11, 2019, a Hearing Panel Decision by FINRA's Office of Hearing Officers found Mellon guilty on all counts. The OHO Panel imposed two separate bars from associating with any member firm in any capacity for conversion and the submission of false expense reports causing the firm's inaccurate books and records; and a Majority of the Panel imposed a third bar for the provision of false information. Mellon was ordered to pay $4,613.94 in hearing costs. The OHO Panel took a very dim view of Mellon's conduct [Ed: Footnotes omitted]:
No mitigating circumstances exist that would warrant any sanction less than a bar. Instead, the Panel is troubled by many aggravating factors. Mellon repeatedly tried to conceal her actions from Wells Fargo. She also caused RL to pay the Outback Bowl even though Mellon had already been reimbursed by Wells Fargo. Mellon submitted four false expense reports over a period of six months. She has not acknowledged her misconduct, choosing instead to blame others, including her assistant, for supposed administrative failings. She downplays her actions, noting that the “amount of the error is not one that changed [her] life style.” Mellon construes the problem as a clerical error that could easily have been rectified by re-allocating the expenses had the negative atmosphere in the office not prevented her from approaching her superiors. The Panel rejects her arguments and determines that Mellon acted deliberately.
Page 19 of the OHO Decision
A Word of Dissent
As to the Minority Panelist's dissent from the Majority's imposition of a Bar upon Mellon for causing Wells Fargo to maintain inaccurate books and records, the Decision offers this explanation:
[T]he Panel member finds it mitigating that Mellon ultimately gave FINRA staff her written permission to obtain the requested records from the Bank of Tampa. Therefore, the more appropriate sanction, the dissenting Panelist finds, is the one the Guidelines provide for a failure to respond in a timely manner to requests for information. For failing to respond in a timely manner, the Guidelines tell adjudicators to consider a fine between $2,500 and $39,000 and to suspend an individual in any or all capacities for up to two years. Guidelines at 33. After considering all the circumstances, the dissenting Panelist finds it appropriately remedial to impose a sanction at the lower end of the ranges suggested by the Guidelines: a $2,500 fine and a six-month suspension from associating with any member firm in any capacity.
Footnote 146 of the OHO Decision 
Bill Singer's Comment on the OHO Decision
Compliments to FINRA on this OHO Panel Decision. It is an impressive and patient exposition of an extensive fact pattern, and the panelists' rationale is presented with clarity.
One parting shot (so to speak), the 2016 Outback Bowl was a contest between the 13th ranked Northwestern Wildcats (10-2 Big Ten season) and the 23rd ranked Tennessee Volunteers (8-4 SEC season). I mean, seriously, someone would pay $3,800 to watch a 13th ranked team play a 23rd ranked team?  Worse, the final score of that snoozer was 45 - 6. 
Oh and one other parting shot, while I'm firin' away here, did FINRA really need three Enforcement attorneys to present its case against Respondent Mellon, who represented herself without legal counsel? Frankly, when I used to be a FINRA regulatory lawyer in the days when FINRA was the NASD, I always handled my cases on my own. I can't recall a single case where I had co-counsel as a regulatory lawyer before OHO's precursor, which in the 1980s was called the District Business Conduct Committee or the DBCC for short. I'm pretty sure that most FINRA lawyers could have handled pro se Respondent Mellon one-on-one given the fact pattern at issue in FINRA v. Mellon.  In the spirit of the Outback Football Bowl, I would flag FINRA here for piling on.
2022: FINRA NAC Decision
The OHO Decision was issued on July 11, 2019. That was pre-Covid. You remember when life was pre-Covid? Yeah, I know, that's a long time ago -- as in another lifetime. Apparently, Mellon appealed the FINRA OHO Panel Decision: FINRA Department of Enforcement, Complainant, v. Nancy Kimball Mellon, Respondent (FINRA National Adjudicatory Council ("NAC") Decision, Complaint No. 2017052760001 / October 18, 2022)
SIDE BAR: Note that the FINRA NAC Decision indicates that:


For the Complainant: Megan Davis, Esq., Kathryn M. Wilson, Esq., and John Guild, Esq., Department of Enforcement, Financial Industry Regulatory Authority

For the Respondent: Pro se.

The NAC made short work of Respondent Mellon's appeal. As to the issue of conversion, the NAC found in pertinent part that:

We conclude that the record clearly supports a finding of conversion, as Mellon intentionally took funds she was not entitled to possess. Mellon knowingly caused her assistant to file false expense reports to obtain reimbursement for expenses she had not paid. Mellon knew that to receive reimbursement for a business expense she must have already paid for it, and therefore she was not entitled to any reimbursement. However, despite this understanding, Mellon submitted a check that she knew had bounced as proof of payment. Therefore, Mellon was not entitled to receive reimbursement from either the Concur or the FAEMS reimbursement system. In addition, even after seeking reimbursement for the entire amount of the Outback Bowl invoice, Mellon sought and received an additional $500 from Wells Fargo using the same dishonored check. This $500 was an amount that, again, Mellon had not paid for expenses and which she would never be able to claim as an unreimbursed expense. It was $500 for which Mellon had no legitimate claim. Thus, Mellon converted firm funds in violation of FINRA Rule 2010.9 
Mellon attempts to minimize the seriousness of her misconduct by claiming it involved an “error in judgment” and just “one returned check.” In fact, Mellon’s misconduct involved a great deal more. Mellon repeatedly sought reimbursement for a $3,800 expense that she knew she had not paid, and she submitted misleading documentation to Wells Fargo in support of her reimbursement claims. Mellon continuously rebuffed JK’s and RL’s efforts to collect the amount due, even though Mellon knew RL was “on the hook” to pay the invoice if Mellon did not. Moreover, when she did receive reimbursements from Wells Fargo for the Outback Bowl expense, Mellon used the funds to pay other personal expenses.
= = = = =
Footnote 9: We acknowledge that the money from the FAEMS account was funded by Mellon with pre-tax contributions from her Wells Fargo compensation. Mellon, however, submitted false reimbursement requests for the Outback Membership before she had paid it, and obtained money from the FAEMS account to pay for personal expenses. Under Wells Fargo’s policies, Mellon was not permitted to use the Wells Fargo FAEMS funds except for legitimate reimbursement. Instead of heeding these conditions, Mellon intentionally submitted false expense reports to collect monies to which she was not entitled. Thus, we conclude that Mellon converted the funds from her firm’s FAEMS account. 
at Pages 9 - 10 of the NAC Decision
In similar no-nonsense fashion, the NAC found that Mellon violated FINRA Rule 2010 when she directed her assistant to submit four falsified expense reports. Further, the NAC found that Mellon violated FINRA Rules 4511 and 2010 when she submitted the falsified reports. Similarly, the NAC found that Mellon violated FINRA Rules 8210 and 2010 when she knowingly gave false and misleading information to FINRA about bank statements. Finally, and not surprisingly, the NAC affirmed OHO's findings and barred her from associating with any member firm in all capacities. In imposing a unitary Bar, the NAC noted in part that:
Mellon now asserts that she is “remorseful and did nothing with intent.” The record belies these claims, demonstrating a troubling lack of remorse by Mellon throughout the proceedings below, and establishing that her misconduct was intentional. As the Hearing Panel observed, Mellon “has not acknowledged her misconduct, choosing instead to blame others, including her assistant, for supposed administrative failings,” and downplayed her actions. Even if we were to credit Mellon’s claim of remorse, it comes too late and is too limited to mitigate the severity of her misconduct. 
We find that Mellon’s deception and dishonesty to Wells Fargo, the Outback Bowl, and FINRA undoubtedly makes her unfit to serve in an industry that heavily relies on the honesty and integrity of its securities professionals. The bars are imposed to protect the public interest. Given that aggravating factors predominate here and that Mellon has failed to establish the presence of any mitigating factors, she has not shown that sanctions less than a bar would protect the public and would be appropriate. Accordingly, Mellon is barred from associating with any member firm in any capacity for her violations.
at Pages 17 - 18 of the NAC Decision
Bill Singer's Comment on the NAC Decision
Compliments to FINRA on this NAC Decision. It is an impressive and patient exposition of an extensive fact pattern, and the panelists' rationale is presented with clarity.
Let me ask again: Did FINRA really need three Enforcement attorneys to present its case before the NAC against Respondent Mellon, who represented herself without legal counsel against three (count 'em) FINRA lawyers before the OHO and then, again, against three (count 'em again) FINRA lawyers before the NAC?  That's another flag for piling on!
Speaking of threes, the OHO Panel imposed three Bars; however, only two were unanimous decisions imposed by all three OHO Panelists; and one of the Bars was a majority decision with one dissenting Panelist as noted in Footnote 146 of the OHO Panel Decision. I'm somewhat puzzled as to why the FINRA NAC Decision is bereft of ANY reference to the Dissenting OHO Panelists rejection of one of the Bars as set forth in Footnote 146 of the OHO Decision. Nowhere in the NAC Decision do I find a reference to "Footnote 146," or "dissent" or "majority decision."
May 2023: SEC Opinion
On December 29, 2022, Mellon (representing herself pro se) filed an appeal with the SEC seeking review of FINRA's bars. 
In the Matter of the Application of Nancy Kimball Mellon For Review of Action Taken by FINRA (Opinion, '34 Act Rel. No. 97623; Admin. Proc.. File No. 3-21267 / May 31, 2023) 
Following the FINRA NAC October 18, 2022, Decision, Mellon had 30 days from her receipt of the Decision to file an application for review with the SEC. On December 29, 2022, Mellon filed her appeal with the SEC. On January 6, 2023, FINRA filed a Motion to Dismiss Mellon's appeal based upon the regulator's assertion that she had filed with the SEC in an untimely manner.
In considering Mellon's two-month filing that was about 30 days beyond the deadline, the SEC conceded that it had the discretion un SEC Rule of Practice 420(b) to "extend the filing deadline upon a showing that 'extraordinary circumstances' justify the delay."
In granting FINRA's Motion to Dismiss, the SEC offered, in part, this rationale: 

Mellon identifies what she describes as “extenuating” circumstances, which she claims “made life exceptionally hectic” during and after the filing period and made it difficult to meet the deadline: “family’s move, final exams in graduate school and administrative difficulties navigating the SEC website.”14 But she fails to explain why these circumstances qualify as “extraordinary,” provide any evidentiary support for this claim, or identify any precedent where we have waived the filing deadline under similar circumstances. For example, Mellon provides no basis for us to conclude how or why her move prevented her from meeting the filing deadline. 15  She does not identify any particular reason for why taking academic exams should excuse her delay. And she links her holiday travel to Thanksgiving and Christmas, which occurred after the filing deadline, and thus could not have prevented her from complying with it.

Finally, Mellon’s assertion that she had difficulty navigating the Commission website is undermined by the instructions provided in FINRA’s October 18, 2022 transmittal letter—and subsequent communications—about what she needed to do. 16  She even acknowledges having had “multiple, very helpful discussions” with staff from our Secretary’s Office, which facilitated her eventual filing of an application, but she fails to explain why she did not seek such assistance at an earlier point. Nor does Mellon’s pro se status exempt her from complying with the Commission’s deadlines. As we have held, “‘[w]e expect even unrepresented parties to comply with our rules,’ and ‘[p]arties, including those appearing pro se, are obligated to familiarize themselves with the Rules of Practice.’”17

In short, even accepting Mellon’s vague assertions that she was busy during the month she had to file her appeal, she has not shown how those circumstances prevented her from doing so.18 To the contrary, her repeated interaction with FINRA staff during this time indicates that she had the time and ability to communicate regarding her intention to challenge the FINRA action. 19 Given Mellon’s failure to establish the requisite extraordinary circumstances to justify her late filing, we grant FINRA’s motion to dismiss.

= = =

Footnote 14: Much of Mellon’s arguments, both in her initial response to the motion to dismiss and subsequent sur-reply, focus on attacking the merits of the underlying FINRA action. As we have
held, “the measure of whether an untimely application presents an extraordinary circumstance is not simply the relative weight of the arguments presented on appeal—otherwise, the ‘extraordinary circumstances’ requirement would be read out of [Rule 420].” PennMont Sec., 2010 WL 1638720, at *5. And we find that none of Mellon’s merits arguments, which she could have raised in a timely appeal, present extraordinary circumstances warranting review.

Footnote 15: See, e.g., Ourand, 2016 WL 4258138, at *3 (finding that applicant’s “relocation from Illinois to Florida” was not an extraordinary circumstance). 

16 See Ballard, 2016 WL 1169072, at *3 (dismissing untimely application in part based on fact that FINRA advised applicant that it needed to file its appeal within 30-day deadline).

Footnote 17: Ourand, 2016 WL 4258138, at *3 (quoting Ballard, 2016 WL 1169072, at *3); see also Ballard 2016 WL 1169072, at *3 (noting that “[t]he filing deadline is clearly set forth in our rules” and that that “an applicant need not identify every contention or argument in an application for review appealing an SRO decision”).

Footnote 18: We have held that, “even ‘when circumstances beyond the applicant’s control give rise to the delay’ in appealing, the applicant must ‘demonstrate that he or she promptly arranged for the filing of the appeal as soon as reasonably practicable.’”  Kenneth Joseph Kolquist, Exchange Act Release No. 82202, 2017 WL 5969252, at *4 (Dec. 1, 2017).

Bill Singer's Comment on the SEC Opinion

As is evident from my coverage (starting in 2019) of Mellon's case, I had no sympathy or empathy for her misconduct. See:

FINRA Takes Wells Fargo Stockbroker Outback To A Bar ( Blog / July 15, 2019)

FINRA Takes Wells Fargo Stockbroker Outback To A Bar For A Second Round ( Blog / October 20, 2022)

For those of you who may be wondering as to my view of FINRA's cases against Mellon, consider these quotes for some guidance: 

Bill Singer's Comment on OHO Decision
Compliments to FINRA on this OHO Panel Decision. It is an impressive and patient exposition of an extensive fact pattern, and the panelists' rationale is presented with clarity. . . .
Bill Singer's Comment on NAC Decision
Compliments to FINRA on this NAC Decision. It is an impressive and patient exposition of an extensive fact pattern, and the panelists' rationale is presented with clarity. . . .
Notwithstanding that Mellon seems to have gotten the sanctions that she deserved, I still find the SEC's dismissal of her appeal to be . . . well . . . that's a tough one. I have no sympathy for her. I'm not troubled by FINRA's case or angered with the SEC's Opinion. Still -- there's just something about the SEC's oh-so-meticulous-insistence that Mellon's appeal was filed about 30 days late. The federal regulator is correct and the filing was late. As such, let me just offer something along the lines of a stream of consciousness explanation as to my unease.
As to the operative dates, let's remember that in 2022, we were still dealing with the Covid pandemic. Following the FINRA NAC October 18, 2022, Decision, Mellon had 30 days from her receipt of the Decision to file an application for review with the SEC. The due date for the filig of her appeal fell only a few days before November 24, 2022, Thanksgiving Day, which a lawyer may have cited as warranting some extension of time. Keep in mind that Mellon was representing herself pro se, so it's to be expected that she may not have been able to churn out the legal crapola like a skilled lawyer. As to the date when she did finally file, it was four days after Christmas Day (which fell on a Sunday in 2022) and two days before New Year's Eve (which fell on a Saturday in 2022). It's hard to imagine that Mellon's untimely filing during the Thanksgiving and Christmas season imposed all that much of a hardship upon FINRA and/or the SEC.
On the other hand, Mellon ain't all that sympathetic and a 30-day deadline isn't a 31 day or 61 day deadline; and if I were representing a client and my adversary was late in filing, I sure as hell would be raising the same ruckus that FINRA did. So, "no," I'm not going to lose any sleep over FINRA's and the SEC's lack of consideration for Mellon. Moreover, I concur with the SEC's determination that she did not present the federal regulator with anything close to an "extraordinary circumstance" warranting the invocation of discretion under SEC Rule of Practice 420(b). 
I would remind the SEC, however, that it doesn't quite hold itself to the same stringent deadlines that it has invoked against Mellon. By way of example, visit "Commission Opinions and Adjudicatory Orders" at; and take note of all the many, many Orders issued in 2022 and 2023 by the SEC "Extending Time to Issue Decision." Read a few of those time-extending Orders and you sure as hell won't see many (if any) extraordinary circumstances entitling the SEC to the extensions. Quite often, when extending the time in which the SEC is required to issue a Decision, the SEC's Order offers this bit of generic brevity:
The Commission has determined, in its discretion, that it is appropriate to extend by 90 days the period within which the decision in this matter may be issued. Accordingly, IT IS ORDERED that such period be, and hereby is, extended to [INSERT DATE].
All of which renders the SEC's denial in Mellon as more of a do as I say and not as I do bit of regulation. 

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