An associated person in Bayonne, NJ, agreed to be barred from the industry, and to continue cooperating with ongoing investigations, to settle FINRA charges she participated in a scheme that caused fraudulent checks to be issued and drawn from her member firm’s bank account.  Ms. Reed, the associated person, prepared fraudulent check requests and disbursed numerous checks drawn on her firm’s bank account in various amounts under $1,000 - totaling over $290,000!  The checks were paid out as fees to firm-authorized transfer agents - although the entities never provided such services to the firm.

    Accomplices to the Crimes.   FINRA found that a coworker initiated the scheme by providing Reed with fictitious billing invoices from such entities.  Ms. Reed, in turn, prepared check requests, which were approved and processed through the firm’s computer system to pay the fictitious fees.  The issued checks were delivered back to the securities processing area, where Reed worked.  Upon receiving the checks, Reed allegedly gave the checks to her coworker, who provided them to a 3rd party not employed by the firm.

In return for initiating and processing the fictitious check requests, Reed received periodic cash payments from her coworker, totaling an estimated $10,000.  The firm apparently became aware of the matter when the NYC Police Department contacted it regarding an individual (the non-firm employee) who was taken into custody in an unrelated matter.  The individual was in possession of certain of the firm checks issued as a result of the scheme.  Upon questioning by the firm, Reed admitted that she participated in the scheme - she then was fired (for cause).  (FINRA Case #2009017054201)

For further details on this case and others, click onto:  [FINRA December Disciplinary Actions]