by Howard Haykin

From 2016 through mid-2018, a broker who had been with Cetera Financial Specialists since 2004 handled or facilitated 18 unauthorized withdrawals totaling nearly $229,000 from the accounts of one of his customers. By 2019, the broker had been discharged. All the withdrawals were based on instructions received from the customer’s son-in-law, who was not authorized to direct transactions in the customer’s account. And, at no time did the broker bother to consult the customer. Lastly, each withdrawal request required the sale of securities in the customer's accounts in order to fund the withdrawals which interestingly were deposited to the customer’s own bank account.

Perhaps equally concerning was that the broker used an unauthorized email account to communicate with the son-in-law about both the customer and the instructions to withdraw funds from the customer’s account. Might the unauthorized emails have implicated a purposeful intent by the broker to violate securities rules and company policies and to side-step his ethical and fiduciary obligations?

INVESTOR / READER TAKE-AWAYS.    Based on details provided by FINRA, the broker seemingly had no viable excuses for his violative actions. He should also consider himself fortunate to have received only a $10,000 fine and a 4-month suspension.

That said, we’re left with some unanswered questions including, the following:

As we see from the above, the best way to avoid defalcations … is to vigilantly monitor or manage one’s accounts and financial affairs.  

[For further details, click on … FINRA Case #2019063123501.]