BROWSE BY TOPIC
Stories of Interest
- Stephen Hicks Barred for Defrauding His CT Hedge Funds - SEC
- Barclays CEO Staley Sees Pay Decline - Frankly, He's Lucky to Still be Employed
- Barclays Female Investment Bankers Earn 21% Less in Bonuses than Male Counterparts
- FINRA Eliminates $400 Fee for Explained Arbitration Decision
- SEC Adopts Statement and Interpretive Guidance on Public Company Cybersecurity Disclosures
- SEC Charges Former Bitcoin Exchange and Its Founder With Fraud
- JPMorgan Chase to Replace NYC Headquarters with 70-Story Skyscraper
- Citigroup Raises CEO Corbat's Pay 48% to $23Mn
- Should Congress Create a Crypto-Cop?
- JPMorgan Weighs Buying an Exchange-Traded Funds Firm
- Hey, Goldman Sachs: Wanna Buy BNY Mellon?
- SEC Order Rejecting Acquisition of Chicago Stock Exchange (CSX) by Chinese-Baesd Company
- Kyle Moffatt Named Chief Accountant in SEC CorpFinance
- SEC Suspends Trading in 3 Issuers Claiming Involvement in Cryptocurrency and Blockchain Technology
- Karen Garnett, Assoc. Director of SEC CorpFinance, to Leave After 23 Years of Service
- Louisiana Adviser Barred for Hiding Losses from Investors
- Connecticut HF Manager Illegally Diverted Investor Money - Now Owes Nearly $13Mn
- White House Cleaning House of Advisors Without Full Security Clearance
- Goldman Projects 30% Growth in Wealth Management Advisor Force
- Whistleblower Alleges Manipulation of CBOE Volatility Index
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
Altered States – FINRA Sanctions
[Photo: William Hurt & Blair Brown in the 1980 movie, "Altered States"]
by Howard Haykin
FINRA commonly issued sanctions against registered individuals – usually brokers – for altering customer documents. For June, FINRA reported 7 such cases. For example, brokers add or change information on customer account documents, or they use signatures from previously submitted documents.
It’s impossible to know how prevalent the practice is – but it’s got to be frequent. That may be why FINRA tends to come down hard on the 'offenders' who get caught. The fines may typically be small ($5K), but the accompanying suspension can extend beyond one year. See below the 7 cases cited this month by FINRA.
FINANCIALISH TAKE AWAY. Broker-dealers might consider using the below listed cases - along with others - in their CEP sessions for brokers. Nothing like emphasizing the downside of altering firm documents. No matter ‘how you slice it’, it’s bad business.
These cases appeared in FINRA Disciplinary Actions for June 2017.
- Adriane L. Cagle was assessed a deferred fine of $5,000 and suspended from association with any FINRA member in all capacities for two months … to settle FINRA charges that she altered several documents that had already been signed by customers and signed as a witness to customer signatures on certain documents without having actually witnessed the customers sign them. (FINRA AWC #2016051146801)
- Matthew Ernest Garbarino was fined $5,000 and suspended from association with any FINRA member in all capacities for four months … to settle FINRA charges that he obtained from customers of his member firm executed, but partially blank, signature pages from change-of-broker forms issued by several annuity companies. He later copied the signature pages and created new change-of-broker forms by filling in numerous annuity contract numbers on the blank portions of the pages containing the photocopied signatures. (FINRA AWC #2014043695701)
- John Edward Olinghouse was assessed a deferred fine of $15,000 and suspended from association with any FINRA member in all capacities for one year … to settle FINRA charges that he altered customer documents he then submitted to his member firm, which caused the firm to have inaccurate books and records. (FINRA AWC #2015045276901)
- Eric Eugene Ott was assessed a deferred fine of $15,000 and suspended from association with any FINRA member in all capacities for 13 months … to settle FINRA charges that he signed a customer’s name to two insurance applications without the customer’s knowledge or consent [along with charges of unreported outside business activities]. (FINRA AWC #2016049496201)
- Eric Stanley Springer was fined $5,000 and suspended from association with any FINRA member in all capacities for one month … to settle FINRA charges that he photocopied customers’ signatures from documents already on file with his member firm, and affixed the photocopied customer signatures onto the signature pages of various forms required to be completed …. (FINRA AWC #2013038505301)
- Robert William Ward was assessed a deferred fine of $7,500 and suspended from association with any FINRA member in all capacities for nine months … to settle FINRA charges that he engaged, and permitted other firm employees in his office to engage, in a practice of obtaining customer signatures on blank or incomplete forms and photocopying customer signatures from previously signed documents [along with charges of failing to update his U4 for tax liens]. (FINRA AWC #2015045555901)
- George Marshall Warner was fined $5,000 and suspended from association with any FINRA member in all capacities for 30 days … to settle FINRA charges that he altered various customer documents on at least five occasions after the customers had already signed them. (FINRA AWC #2014043727001)