The Operations Manager, a registered supervisor in a California branch of Citigroup Global Markets, agreed to settle FINRA charges that she failed to detect, or follow up on, violations committed by a registered sales assistant under her supervision.  The sales assistant, in turn, took full advantage of the lax supervision by increasingly plundering customer accounts. Sanctions. Patricia Elizabeth Collantes agreed to a $8K fine and a 4-month suspension in any principal capacity.

[C-I Note: The sanctions to Collantes, based solely on the facts listed below, appear to be a travesty - totally senseless and failing to try and address the severity or seriousness of her supervisory failures - which, in and of themselves, seemed to have bordered on recklessness, if not grossly negligence.

Of course, with respect to FINRA officials, we do not have a complete set of facts.  But still ..............  After all, by enabling a sales assistant to steal $750K from customers over an 8-year period, a fine in excess of $8K might be appropriate.  And, while she is prohibited from supervising for 4 short months, she continues to work and draw a salary.]

Financial Career of Patricia Collantes. Joined Citigroup Global Markets, and became registered with FINRA, in January 1996, and worked there until 12/17/10.  Collantes worked at the Palo Alto branch office.  She had the following relevant disciplinary history:  (i) In May 2006, she consented agreed to a 3-month suspension for violating NYSE Rule 476(a)(6) and for causing CGMI to maintain inaccurate books and records. FINRA Findings and Allegations. Collantes allegedly failed to supervise an individual (registered sales assistant, or "RSA") who over 8 years, misappropriated $750,000 from customers, falsified account records and engaged in unauthorized trades.  It didn't take a rocket scientist to observe the supervisory and systems lapses at the branch, and deliberately targeted the firm’s most vulnerable customers. Among Collantes' numerous, long-running supervisory failures:

• Upon detecting mismatches between new account information and information kept in a 3rd-party database - from exception reports - Collantes asked the RSA to provide a written explanation for each mismatch, which she accepted with conducting further reviews.

• When reviewing transfers of funds, disbursements and changes to account information - including address changes - Collantes reviewed LOA's, but typically only to see that the particular LOA was complete.  She did not make reference to prior LOAs or account statements for that same account, which precluded any adequate response to suspicious activity in customer accounts as reflected in LOAs.

• An instance where the RSA used a series of LOAs to channel money from customer accounts to herself did not prompt Collantes to investigate further.

• The RSA maintained a fraudulent account in which she:  (i) changed the residential account address on a fraudulent account the RSA created in her relative’s name to reflect her own residential address;  (ii) made transfers from unrelated trust accounts to the fraudulent account totaling $32,364.78;  (iii) added check-writing to the fraudulent account and a checkbook was sent to the RSA's residential address;  (iv) she used the newly-issued checks to disburse the transferred funds the newly-issued checks;  (v) the RSA again changed the address for the fraudulent account in her relative’s name.

For each of these suspicious activities, Collantes failed to obtain an adequate response, thus enabling the RSA to continue to defraud firm customers. For further details, go to:  [FINRA AWC #2008013231504].    [Disciplinary Actions for January, 2012]