BROWSE BY TOPIC
Stories of Interest
- North Korean caught secretly mining bitcoin rival
- IPO Timelines Cut by 80% After SEC's Private Filing Decision
- How the Carried Interest Break Survived the Tax Bill
- FINRA: The Neutral Corner
- Coinbasex Says Buying and Selling Temporarily Disabled Amid Price Rout
- Bitcoin plunges by more than a third in a single day
- Goldman Is Setting Up a Cryptocurrency Trading Desk
- Jefferies Lets Employees Choose When to Receive Their Bonuses
- UBS Told to Pay $903K After Losing Retaliation Verdict
- BEWARE: Long Island Iced Tea Shares Soar After Changing Name to Long Blockchain
- Gary Cohn’s Last Laugh: Cashing Out on Trump’s Tax Plan
- E*Trade Lets Customers Trade in CBOE Bitcoin Futures
- Swiss Find Serious Shortcomings at JPMorgan in 1MDB Case
- Washington-based Investment Adviser and His Business Partner Charged in Multi-Million Dollar Scheme
- FINRA Board of Governors Meeting
- Cryptocurrency Market Now Doing Same Daily Volume as the NYSE
- Jailed Barclays Trader Must Pay $400,000 From Libor Profits
- Trump Asks ‘How’s Your 401(k)?’ But Most Voters Don’t Have One
- A Bitcoin Hedge Fund’s Return: 25,004% (That Wasn’t a Typo)
- Madoff Victims Near Full Recovery of Principal With Payout
We seek to provide information, insights and direction that may enable the Financial Community to effectively and efficiently operate in a regulatory risk-free environment by curating content from all over the web.
Stay Informed with the latest fanancialish news.
NEWSLETTERS & ALERTS
A Broker Trips Up on His False Statements
[Image: Walt Disney]
by Howard Haykin
A young broker agreed to a $2.5K fine and a 3-month suspension to settle FINRA charges that he lied (made false statements) to a new employer about the circumstances of his termination from his previous firm.
PROFILE. This broker from Leonia, NJ, has 5 years’ experience with 6 firms – a questionable ratio, though 3 years with one firm. In February 2016, he was U5’d by Wells Fargo Advisors for providing incorrect information “regarding his separation from previous employer.” He had been with that previous employer, JPMorgan Securities, for over 3 years.
FINRA FINDINGS. In October 2015, JPMorgan Securities terminated the broker’s employment after receiving customer complaints related to his sales of mutual funds. At that point in time, he had been associated with JPMorgan for 3 years – since 2012. The firm U5’d him on 11/11/15.
During the process of seeking to become associated with Wells Fargo Advisors, the broker gave false statements on 2 occasions. First, he submitted a pre-registration disclosure and consent form in which he falsely stated that he left his most recent position voluntarily and denied being subject to any sales practice customer complaints that have not been reported on FINRA’s CRD system.
Question 1: "Will you/did you leave your most recent position voluntarily?”
Answer: “Yes,” despite knowing that JPMorgan Securities had recently terminated his employment for cause.
Question 2: Have you ever "been subject to any sales practice customer complaints that have not been reported on the FINRA [CRD] System?”
Answer: “No,” despite being aware of numerous undisclosed customer complaints filed against him.
Second, on the day Wells Fargo filed Form U4 on his behalf (11/30/15), the broker told the firm’s hiring manager that he had voluntarily resigned from his previous firm - which was false.
FINANCIALISH TAKE AWAYS. Lying during a hiring interview or application process is a huge mistake. When the truth comes out, the employee will be fired and his or her record will be forever stained. Rather than lying, perhaps the broker's best bet is to acknowledge past mistakes and ask the new firm to give him a second chance in order to prove that he’s ‘learned from his mistakes’.
It’s interesting to the wording of Question #2 on the Disclosure and Consent Form - it asks for “any sales practice customer complaints that have not been reported on the FINRA [CRD] System?” For the record, this broker’s BrokerCheck records did not disclose any no customer complaints – open, closed or pending. Nor did it provide any ‘for cause’ termination disclosure from JPMorgan Securities.
Which raises these questions – to which FINRA might provide answers, if only to assist member firms in their hiring processes:
► Why weren’t the customer complaints or JPMorgan’s ‘for cause’ termination listed on this broker’s CRD?
► How did Wells Fargo Advisors find out about these complaints and sales issues?
This case was reported in FINRA Disciplinary Actions for November 2017.
For details on this case, go to ... FINRA Disciplinary Actions Online, and refer to 2015047810201.