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NEWSLETTERS & ALERTS
MetLife Broker Takes the Knicks to the Bank
by Howard Haykin
A Financial Services Representative cheated MetLife Securities out of at least $14,600 by submitting and collecting on false expense reports. For his violative conduct, this broker was barred from the industry
In April 2014, this broker was U5’d by MetLife after admitting that he had “not followed firm policy with respect to business expense reimbursements.” The broker immediately associated himself with another broker-dealer, BCG Securities.
FINRA FINDINGS. Between March 2012 and November 2013 (the "Relevant Period"), the Financial Services Rep prepared several false expense reports and submitted them to MetLife Securities, seeking reimbursement pursuant to the Firm's marketing reimbursement program. In actuality, the preapproved client marketing events on which he claimed reimbursable expenses never occurred. There were at least 5 such ‘phantom’ events.
Date of Amount Paid
Purported Event Marketing Event by MetLife
March 28, 2012 NY Knicks Basketball Game $1,314.15
June 5, 2012 Dinner at Porter House Rest. $2,700.00
July 24, 2012 Dinner at The Palm Rest. $1,630.54
October 25, 2013 Dinner at Avenue Restaurant Grp $2,962.25
November 23, 2013 Kanye West Concert $6,000.00
METLIFE’S CO-OP MARKETING PROGRAM … subsidized certain marketing expenses that representatives incurred in entertaining clients and potential clients. According to the program for the Park Avenue (New York) branch, brokers could seek reimbursement for up to 50% of certain preapproved marketing expenses, subject to a marketing budget the branch provided.
- Before seeking reimbursement, the broker had to secure preapproval for the subject marketing event through MetLife’s Sales Material and Compliance Review System.
- After the preapproved event took place, the broker who organized the event had to submit an expense report identifying the actual expenses incurred for the preapproved event, with supporting documentation.
- If the actual expenses incurred were consistent with Firm policy, the Firm would reimburse the requesting broker up to 50% of the amount of actual expenses incurred for the preapproved event.
NY KNICKS BASKETBALL GAME (3/28/12). On March 26th, the broker requested preapproval of expenses for a “Seminar-Knick game” to take place on March 28, 2012. He estimated that the event would have 12 attendees and cost $2,700. The Firm preapproved the event.
The broker, however, never purchased tickets for the game. Nor did he hold a seminar or other marketing event at that game. Instead, the broker altered a transaction record from his online American Express account to create a PDF that purported to show that he paid $2,630.30 to Ticketmaster on March 26, 2012 with "Knicks" in the transaction description.
On March 28, 2012, supported by the above-referenced altered transaction record, the broker submitted an expense report to MetLife requesting reimbursement of $1,314.15 (~50% of the $2630.30 purportedly paid) for the March 28, 2012 Knicks game as a client appreciation event. MetLife reimbursed the broker $1,314.15 based on the representations in his 3/28 expense report.
PORTER HOUSE RESTAURANT (6/5/12). On May 29th, the broker requested and received preapproval of expenses for a “Marketing Event" to be held June 5, 2012, at the Porter House Restaurant for 40 people. The estimated cost was $5,200.
The broker, however, did not hold the market event; nor did incur any charges related to such an event. Instead, the broker altered a transaction record from his online American Express account to create a PDF that purported to show that he paid $5,296.19 to the Porter House restaurant.
On June 7, 2012, supported by the above-referenced altered transaction record, the broker submitted an expense report to MetLife requesting reimbursement of $2,700.00 (~50% of the $5,400 purportedly paid) for the June 5th marketing event. MetLife fully reimbursed the broker the amount requested, $2,700.00.
This case was reported in FINRA Disciplinary Actions for November 2018.
For details the case, go to ... FINRA Disciplinary Actions Online, and refer to Case #2014040761001.