BROWSE BY TOPIC
- Bad Brokers
- Compliance Concepts
- Investor Protection
- Investments - Unsuitable
- Investments - Strategies
- Wall Street News
- Investments - Private
- Rules & Regulations
- Bad Advisors
- Boiler Rooms
- Terminations/Cost Cutting
- General News
- Donald Trump & Co.
- Big Banks
- Regulatory Sanctions
Stories of Interest
- Sarah ten Siethoff is New Associate Director of SEC Investment Management Rulemaking Office
- Catherine Keating Appointed CEO of BNY Mellon Wealth Management
- Credit Suisse to Pay $47Mn to Resolve DOJ Asia Probe
- SEC Chair Clayton Goes 'Hat in Hand' Before Congress on 2019 Budget Request
- SEC's Opening Remarks to the Elder Justice Coordinating Council
- Massachusetts Jury Convicts CA Attorney of Securities Fraud
- Deutsche Bank Says 3 Senior Investment Bankers to Leave Firm
- World’s Biggest Hedge Fund Reportedly ‘Bearish On Financial Assets’
- SEC Fines Constant Contact, Popular Email Marketer, for Overstating Subscriber Numbers
- SocGen Agrees to Pay $1.3 Billion to End Libya, Libor Probes
- Cryptocurrency Exchange Bitfinex Briefly Halts Trading After Cyber Attack
- SEC Names Valerie Szczepanik Senior Advisor for Digital Assets and Innovation
- SEC Modernizes Delivery of Fund Reports, Seeks Public Feedback on Improving Fund Disclosure
- NYSE Says SEC Plan to Limit Exchange Rebates Would Hurt Investors
- Deutsche Bank faces another challenge with Fed stress test
- Former JPMorgan Broker Files racial discrimination suit against company
- $3.3Mn Winning Bid for Lunch with Warren Buffett
- Julie Erhardt is SEC's New Acting Chief Risk Officer
- Chyhe Becker is SEC's New Acting Chief Economist, Acting Director of Economic and Risk Analysis Division
- Getting a Handle on Virtual Currencies - FINRA
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
Broker Fabricated Statements Used to Secure $3.2Mn in Bank Loans
by Howard Haykin
In early 2010, a broker with Hilltop Securities created a false account statement for a customer, who said he needed a ‘working capital’ bank loan for his company. The broker accommodated the request by changing the name, address and account number on someone else's customer statement, which showed the account holding more than $3 million in securities. The broker then gave the false account statement to the bank's loan officer and, based in part on that false statement, the bank issued a $1.872 million loan.
After that, the broker continued to create a false account statement for every month - from April 2010 until October 2016 and again from September 2018 until January 2019 - because the bank required such statements. For all his 'services', the broker received $50,000 from his customer.
Based in part on the false account statements, the bank increased its business with the customer’s company to the point where the the loans exceeded $3.2 million. In January 2019, the customer’s company defaulted on its bank loans, leaving the bank with a total loss.
In September 2019, the Financial Industry Regulatory Authority (FINRA) closed the loop by barring the broker from the industry - though the broker apparently was able to retain his $50,000 in fees.
[For further details, click on FINRA Case #2019061689501.]