BROWSE BY TOPIC
- Bad Brokers
- Compliance Concepts
- Investor Protection
- Investments - Unsuitable
- Investments - Strategies
- Investments - Private
- Rules & Regulations
- Bad Advisors
- Boiler Rooms
- Terminations/Cost Cutting
- Wall Street News
- General News
- Donald Trump & Co.
- Regulatory Sanctions
- 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
Rookie Mistakes by an Experienced Broker
by Howard Haykin
In January 2012 a woman established a Transfer on Death account for the benefit of her children. The customer explained to the broker that she was funding the account with her own funds and stated that she was not giving her husband access to the account.
In late November 2015, the customer’s husband called the broker to withdraw funds from the account – explaining that the customer's health was deteriorating, and she required $20,000 for an urgent treatment.
- The broker asked to speak to the customer, but the husband said she was too ill to speak.
- The broker told the husband that a power of attorney was required, and the husband claimed he had a power of attorney and would provide it – although he never did.
- The broker carried out the husband's instructions to withdraw $20,000 from the account without receiving a power of attorney – raising the necessary funds by selling $20,000 worth of a mutual fund in the account.
- Under the broker’s authorization, the Firm issued a $20,000 check to the customer.
On 2 more occasions – in January 2016 and then in late January / early February 2016 - the husband requested additional withdrawals, each for $10,000. On both occasions …
- The broker acted without authority by selling mutual funds in the account to raise funds.
- Under his authorization, the Firm issued $10,000 checks to the customer.
AN APT CONCLUSION. Needless to say, ...
- the husband never delivered the POA, and at no time did he ever have any authority over the account.
- the customer's account was reimbursed and her investment positions (prior to the husband's withdrawal requests) were reinstated - by whom, we don't know.
- the broker settled with FINRA, paying a $7.5K fine and serving a 45-day suspension.
This case was reported in FINRA Disciplinary Actions for August 2018.
For details on either case, go to ... FINRA Disciplinary Actions Online, and refer to Case #2016049887101.