BROWSE BY TOPIC
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
Newbie Broker Gets 2-Year Suspension After Impersonating Fund Shareholders
[Photo: 'Bad Actors']
by Howard Haykin
A young registered rep for Realty Capital Securities (“RCS”) agreed to serve a 2-year suspension to settle FINRA charges that he impersonated shareholders and participated in several telephone calls where others impersonated financial advisors or shareholders. The purpose of these calls was to cast false proxy votes on the shareholders’ behalf in connection with annual shareholder meetings for various funds.
FINRA FINDINGS. As an entry level, junior internal wholesaler at RCS, this broker was largely responsible for contacting financial advisors to discuss investment opportunities in certain non-traded REITs and other funds. In 2015, his responsibilities changed when RCS was retained by its affiliate, American Realty Capital ("AR Capital"), to conduct proxy solicitation services for the annual shareholder meetings of several of AR Capital's sponsored funds.
RCS required its junior internal wholesalers to contact shareholders and encourage them to record their vote with AR Capital's proxy tabulation service, BFS. For the various funds to achieve a quorum to hold the meetings, tens of thousands of shareholder votes were required. Accordingly, proxy season was a high-pressure environment, and RCS employees were encouraged to work long hours and make no less than 200 calls to shareholders per day. Between May and September 2015, this young broker made thousands of phone calls to shareholders and encouraged them to vote.
- But, on 3 occasions, at the direction of his supervisor, he impersonated 3 shareholders in phone calls with representatives of BFS and voted their shares in favor of Board and management proposals.
- At the direction of his supervisor, this broker also participated on several telephone calls where he introduced his supervisor as certain shareholders or their financial advisors. His supervisor then impersonated the shareholder or financial advisor and fabricated shareholder votes in favor of the proposals by the Board and management for the various AR Capital funds.
- None of the votes were authorized by the shareholders or their financial advisors.
This case was reported in FINRA Disciplinary Actions for January 2018.
For details on this case, go to ... FINRA Disciplinary Actions Online, and refer to Case #2015047826301.