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Regulatory Sanctions

Bad Actors – Brokers Who Tried to Impersonate Their Clients

September 13, 2017

by Howard Haykin


In August, FINRA reported disciplinary actions against brokers who, along with their cohorts, impersonated their clients on calls to third part institutions. Instead of Academy Awards for their portrayals, the pair got Walking Papers.


JOSE PEREZ CASE #2015044718001.    Jose Perez agreed to a $5K fine and a 30-day suspension to settle FINRA charges he and an assistant impersonated customers to effect a transfer of retirement funds his customer requested,


BACKGROUND.    In February 1998, Perez, a resident of Orland Park, IL, became registered as an Investment Company Products / Variable Contracts Rep with MetLife Securities. He remained with that firm for 17 years, until February 2015. He joined another FINRA member firm shortly thereafter, but stayed with that 2nd firm for only 3 months.  Perez is currently not registered with a broker-dealer. He has no disciplinary history.


FINRA FINDINGS.    Between 1998 and 2014, Perez was the registered rep of record for customer “SG.” During that time, SG held an IRA account at MetLife Securities. In January 2014, SG advised Perez that she was retiring and requested that he transfer pension funds held by a 3rd party company to her IRA account at MetLife Securities. Eleven months later, on or about 12/2/14, in an attempt to accommodate the request made by his customer, Perez and his assistant called the 3rd   party company on the telephone, and here’s what transpired:


►   Rather than disclosing their real names, however, the assistant impersonated SG, and Perez identified himself as SG’s brother.
►   The assistant authorized the 3rd party company to take direction from SG’s brother with regard to SG’s retirement funds.
►   Perez got on the phone as SG’s brother and directed the 3rd party company to transfer funds to the IRA account at MetLife.
►   The plan worked and the call was completed.


However, unbeknownst to Perez, SG held 2 retirement accounts with the 3rd party company – one in a pension account; the other in a 401(k) plan account. As a result of the directions given by Perez, the funds held in the 401(k) account, rather than the ones held in the pension account, were transferred to MetLife Securities. Shortly after the wrong transfer was made, the customer’s son complained to the firm and the transaction was reversed.


RYAN LAWSON CASE #2016051344701.    Ryan Lawson also agreed to a $5K fine and a 30-day suspension to settle FINRA charges that he and another individual impersonated a member firm customer over the phone to effectuate an account transfer to the firm from another firm.


BACKGROUND.    Lawson, a resident of Bowling Green, KY, first became registered with a FINRA member firm in May 2005. Obtaining his Series 22 and Series 63 licenses. He then obtained his Series 7 and Series 66 licenses in April 2008. In February 2016, Lawson became registered with U.S. Bancorp Investments, but voluntarily resigned 6 months later while under internal review for the conduct described herein. He currently is not associated with a FINRA member firm.


FINRA FINDINGS.   In August 2016, Lawson met with a Bancorp customer and his wife. During the meeting, the customer and his wife expressed a desire to transfer their retirement accounts to Bancorp from another firm. The funds to be transferred to Bancorp totaled nearly $70,000.  The next day, on 8/16/16, Lawson made 2 calls to the other firm to effectuate the transfer of funds to Bancorp. During the calls, Lawson twice impersonated the customer and he also asked an employee of Bancorp's affiliate bank to impersonate the customer's wife.


While the customer and his wife, both of whom are elderly, had expressed an intention to transfer their funds to Bancorp, they were not aware of and did not authorize Lawson to impersonate them in order to effectuate the transfer. Shortly thereafter, the firm conducted an internal investigation.


FINANCIALISH TAKE AWAYS.    For brokers with some lengthy experience – 16 and 11 years, respectively – these two brokers took some incredibly stupid actions. And in the first case, Perez performed his impersonation some 11 months after the customer mentioned her intention.


Stating the obvious, Perez and Lawson should each have offered to assist their customers with the transfers - by offering to find out the initial steps toward effecting the transfers. Without needing to impersonate their customers, both Perez and Lawson could have obtained forms and instructions that were needed to get the process started.


Perhaps that was too much to expect from brokers who apparently were overanxious to get customer assets under management.