BROWSE BY TOPIC
- Investments - Private
- Investor Protection
- Investments - Unsuitable
- Compliance Concepts
- Investments - Strategies
- Regulatory Sanctions
- Rules & Regulations
- Bad Advisors
- Bad Brokers
- Boiler Rooms
- Wall Street News
- Terminations/Cost Cutting
- General News
- Donald Trump & Co.
- Big Banks
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
Like Money Flying Out the Window at Royal Alliance
by Howard Haykin
Between 2009 and 2017, a New Jersey-based broker used 66 wire transfers and one check payment to steal over $1.5 million from 2 customers – one of whom was a disabled widow. Most of the payments were directed to a single bank account that was not titled in the customers’ names. Yet, the firm never bothered to identify the rightful owner of that account.
Between 2013 and 2017, a Massachusetts-based broker used 65 wire transfers and two check payments to steal over $2.3 million from 2 customers. All wires were unauthorized, while customers were coerced into having Royal Alliance issue checks against their accounts. The wires found their way into a bank account registered in the name of an LLC (limited liability company) and not in the customers’ names. Nevertheless, the firm treated all as first-party transfers.
CUSTOMER TAKE-AWAYS. Criminal theft, incompetence, and plain negligence can occur at financial services firms. So, it’s incumbent upon customers to monitor their monthly account statements for large, unusual and unauthorized transactions. Individuals who are unable to conduct such reviews should seek the assistance of an independent financial watchdog, who can look over the person's financial affairs. Where appropriate, the 'financial watchdog' role can be filled by a trusted family member or friend.
FITTING CONCLUSION TO THE CASE. In the end, Royal Alliance fully compensated its customers for their losses. The firm was also fined a total of $840,000 and ordered to revise its deficient policies, procedures and internal controls.The New Jersey registered rep and the Massachusetts registered rep were both barred from the industry in 2018, and both pleaded guilty to criminal charges. The NJ registered rep is now serving 70 months in prison, while the MA registered rep is serving 87 months, to be followed by 3 years of supervised release. As for the cashiering personnel and supervisors, it’s anyone’s guess as to what, if any, punishment they received. But termination of employment would certainly seem a fitting consequence, at least for some.
[For further details – in particular, the failings of the cashiering personnel – click on FINRA Case #2017056769402.]