[ by Melanie Gretchen ] An RR with Royal Bank of Canada (RBC Capital Markets) was able to game the system and make improper changes of address to 4 customer accounts.  In 3 instances, he replaced the customer's address with his own;  in the fourth, he replaced the existing address with that of his neighbor. Broker's Professional Background. Rod Cushing was a Salt Lake City-based registered rep with RBC Cap Markets from June 1998 to January 2010 - it was during this period that he allegedly committed the violations.  Cushing entered the industry in 1994 as a broker with Smith Barney.  After leaving RBC, he joined Cambria Capital, where he's currently employed. FINRA Findings and Allegations. Between December 2009 and January 2010 - a 2-month period - while at RBC from, Cushing instructed administrative personnel to prepare change of address forms for client approval.  He "then caused the forms to be signed by the customers and submitted to the Firm."

[C-I Note: RBC terminated Cushing in January 2010, with the following notation his Form U-5: "Encouraged clients in writing to change their address to the address of the financial consultant's to accommodate the household feature and avoid the firm's annual fees for smaller accounts."Based on this information, we surmise that Cushing told his customers that he could help them avoid certain fees by replacing their mailing address to his.  This, of course, presumes that customers knew what information was provided on the form and willingly signed it.

And, while the violations committed by Cushing caused the firm's books and records to be inaccurate, the apparent circumstances indicate that perhaps neither the firm nor its personnel should be faulted for not catching the error - after all, the instructions were signed by customers.

On the flip side, someone picked up on the ruse - either RBC or FINRA - perhaps by questioning how 3 unrelated customers all had the same mailing address - which happened to be the broker's own address. Take Away: Perhaps firms should consider how it might add an extra control mechanism to prevent improper changes to customer addresses.  One thought would be to generate printouts of multiple accounts with the same mailing address;  or matched against addresses of firm personnel.  The key is to do so without getting overwhelmed with so many "false positives" - i.e., it's very common for many accounts to have the same mailing address.

Violations. By making RBC's books and records inaccurate, Cushing violated NASD Rule 3110 and FINRA Rule 2010, as well as Section 17(a) and Rules 17a-3 and 17a-4 of the Securities Exchange Act of 1934. FINRA Sanctions. To settle FINRA charges, Cushing agreed to a 45-day suspension and a $15,000 fine. For more details:  [FINRA AWC #2010021662101, January 2012].