This story hit my radar earlier in the year, and I filed it away in the pile of stuff to review and write about later. Later finally came, and today I’ll share with you the story of a financial advisor who apparently thought it was a good idea to trade 50 days of free parking for his career and ability to be registered with a broker-dealer. Probably not the best way to spend the value of $731. Read on.
Earlier this year, FINRA reported that it barred a financial advisor (the FA) from being associated with a broker-dealer in any capacity, after FINRA made findings that the FA used his firm’s parking validation stamp to get free parking for 50 days during a period of a little over four months. The FINRA AWC (Letter of Acceptance, Waiver and Consent) which is the settlement document for this enforcement action, is a bit light on the details, but it explains that the FA’s firm paid for employee parking in certain situations (though we don’t know what those situations are) and that they validated this parking with a parking stamp and the initial of a manager or other employee. Anyway, we’re then told that the FA at issue used the parking stamp and forged the manager (or other employee’s) initials or signature on these parking tickets for 50 days, causing the firm – it appears – to pay for about $731 in parking fees that it did not properly authorize. I’ll tell you that the AWC does not detail whether the firm actually paid this amount out of its pocket or whether a certain amount was allowed pursuant to its lease, etc. Regardless, FINRA made official findings that by engaging in this conduct, the FA, “converted $731 of the Firm’s funds for his own benefit” in violation of FINRA Rule 2010. In terms of sanctions, this FA was barred from the industry, meaning that he cannot be associated with any FINRA member firm in any capacity.
All of this for $731 in parking? Yep.
And this had nothing to do with any investor being harmed, being given bad advice, or losing money? That’s right.
Financial advisors, take heed. The regulators pounce on stupid stuff like this, and the results can be significant and disastrous. It appears that this FA had been in the business for about 9 years when this came up. That career is now over. And that mark on his record can follow him around to other careers, affecting ability to obtain other professional licenses, etc., so this can have a lingering effect well beyond the FA leaving the broker-dealer industry.
If you want to look the case up on FINRA’s enforcement actions database, the case number is 2016048768101.