|
In 2022 we have seen a variety of FINRA Enforcement investigations ranging from FINRA 8210 letters related to a Registered Representative's: 1) personal purchase of stock while posting on internet bullitin boards such as Reddit implicating FINRA Rule 2210 relating to Communications with the Public, and FINRA's Social Media Guidance within Regulatory Notice 10-06 Guidance on Blogs and Social Networking Web Sites. We successfully defended the rep in drafting a clear persuasive response to a 2022 FINRA 8210 Letter Inquiry demonstrtating how our client did not violate FINRA rules, resulting in a simple warning letter which is not reportable on one's CRD record. 2) use of applications such as Whats App and We Chat so as to communicate with clients overseas resulting in communications which were not reviewed by the representative's Broker Dealer . We have responded to an 8210 Letter triggered by a termination and U5 filing resulting from the use of such apps and are awaiting the outcome. This trigger of the 8210 letter from the U5 filing highlights whey it is imperitive that a representative retain counsel as soon as they are terminated so that counsel may engage with their former employer BEFORE any U5 is filed which may then tigger a lenghty and costly FINRA 8210 letter. While we can not gurantee such engagement would avoid a 8210 letter, we are typically successful in influencing in what the employer places on any U5 so as to have the least impact on future employment and perhaps avoid the triggering of a FINRA 8210 investigation, as we are very familiar with what causes such triggers. 3) continued abuse of company expense accounts, food allowances, computer allowances, etc. as we have posted here previously. FINRA continues to issue 8210 letters related to terminations associated with unauthorized use of company expense accounts for personal expenses, whether for food, transportation or technology charges. We continue to represent numerous representatives who are terminated for the abuse of such accounts which much to the suprise of many representatives FINRA takes seriously and can be viewed as theft resulting in a Bar from the industry. 4) arrests, and/or convictions that had not been reported to FINRA as required. We continue to receive inquiries from reps regarding what needs to be reported and, just as important, what events do not need to be reported under FINRA rules. If you were recently terminated from a firm and want professional assistance in engaging with your former employer regarding your U5 so as to possibly avoid triggering a FINRA Enforcement Investigation and preserve your future employability, OR if you have received a FINRA Enforcement 8210 letter - DONT WAIT (as we may not be able to help you if you do wait) contact our offices for a FREE consultation as soon as possible.
1 Comment
In August of 2021 FINRA fined and suspended for one month Former Registered Rep Giordan Marc Zaro who had worked Merrill Lynch. It would appear from the rendition of facts that Mr. Zaro was terminated by his employer Merrill Lynch for sending "confidential and proprietary information to his personal email address." It would appear that as a result of such termination, which appeared to have been done before the Rep could leave on his own, Merrill had filed a U5 reflecting such action which presumably was for the purpose to solicit his clients after he arrived at his new firm. It would appear that the U5 termination filing then triggered a FINRA Enforcement investigation which led to the suspension and fine, accomplishing a lot more for Merrill than they could have accomplished without triggering a FINRA Enforcement Investigation, tarnishing the Rep's entire career. Zaro joined the financial services industry in January 2017 with AXA Advisors and left the the same year to join Merrill in February 2018. Since his discharge from Merrill, Zaro registered with Emerson Equity in March 2020, according to BrokerCheck. He moved to Invicta Capital in January of 2021, but he has since departed such firm and has not registered with another firm..
This series of events should be a wake-up call for any Rep thinking of departing their firm and what not to do in planning for such departure. Taking/transferring files out of the office without authorization to do so, even if temporarily, is seen as theft and a violation of FINRA's Code of Conduct. Departing employees should consult with a competent FINRA Attorney when changing firms so as to avoid mistakes such as this which have long term consequences. I have advised hundreds of Registered Reps in the transition process of changing firms, so as to avoid all complications, arbitrations, and regulatory issues and to ensure a smooth transition. If you are transitioning from one firm to another contact us for a free phone consultation at 212-764-3100. Stuart D. Meissner Esq. Recently FINRA has been taking actions against brokers who miscode production numbers so as to avoid crediting former reps who had retired and left their book of business to the new rep. While most may think that the worst case scenario would be that the retired broker may file an arbitration against them if they found out, it turns out that is the least of the concerns. As noted in the recent cases of former Morgan Stanley brokers who not only were discharged by Morgan Stanley even though such miscoding was at the encouragement of supervisors, FINRA then took enforcement action against the reps. Most recently in the matter of John Miller, who was fined $15,000 and suspended for 15 days for violating high standards of practice. Such deal apparently was only permitted because of the involvement of management in the miscoding, as otherwise he would have faced conversion (theft) charges and a likely Bar.
Once again this matter shows why it is important to retain a qualified experienced FINRA Attorney to represent you in any FINRA Enforcement investigation as it could mean the difference between working in the industry and not. As a recent article in Financial Advisor IQ points out when a Registered Representative / Broker receives an 8210 Letter from FINRA requesting information and a signed statement, it would be wise to quickly call an experienced FINRA Attorney to assist in the initial response. Typically this follows a termination where the same Rep failed to contact an experienced FINRA Attorney to engage with the firm about what will be submitted in their U5 filing, which may have avoided the dreaded 8210 letter. The initial response to any 8210 letter sets the stage for what happens later. Too many reps call us, only after they responded on their own, to save money, only to learn that their response only did further damage, causing FINRA to further focus on them, by asking more questions and/or requesting that they come to FINRA for an on the record in intereview or an OTR. As a result not only is the time needed for an attorney to assist substantially lengthened, but the Rep is locked into a statement which is not helpful. These days there are many FINRA Enforcement action related to firm's meal reibursement programs such as the recent firing/suspension of a Morgan Stanley representative who did not have counsel), and/or a Fidelity broker who took advantage of a computer reimbursement programs allowance program. We have written about this issue before but it bears repeating as FINRA has been on war path with regard to such issues. Such programs provide for the expenditure of certain meals which the rep abuses, and/or the reimbursement for the purchase of a laptop which the rep then returns, but keeps the funds. These matters involve serious charges which reflect upon honesty and theft and thus FINRA takes such allegations seriously. In theory, these matters can turn into criminal proseuctions, as FINRA and/or the firm involved can refer them to local prosecutors. Those that treat such investigations as minor are in for a rude awakening when FINRA later suspends or Bars them. Further, most representatives, being self represented or represented by inexperienced FINRA counsel who are not familiar with FINRA's rules, fail to realize that a suspension even if short can in effect be the same as a bar if the AWC alleges it was intentional. As a result, the represenative becomes statutorily disqualified from the industry, meaning any firm that employs them would need to implement signficant oversight over the rep such that it makes it impossible for a firm to afford to employ them and they cant find a job. In addition, any admissions can in theory be used for a criminal prosecution. I have handled hundreds of U5 negotiations/FINRA 8210 Letter responses to date, and I have found that it is rare to find a case where we did not assist altering the U5 language so that the language was less impactful on the rep and/or avoided a potential 8210 Letter* while still accurate as to the reason for the departure. We engage with the firm and question every word of the proposed language asking the firm to attempt to support their proposed langauge or otherwise encourage them to alter it so that it better reflects what they know or do not know. Further, upon being retained to respond to a FINRA 8210 letter we request that the client provide us with their proposed response to FINRA as the first step. We have yet to see a single proposed response which did not require substantial modification while keeping the response accurate. For example, many representatives provide too much information , which was not even requested, and in so doing make matters worse. As a result, as many of our former clients attest to, we often succeeded in avoiding many of the negative repriccussions that would have been career ending for our clients wihout our assistance*. If you wish to have a free confidential/privleged phone consultation on your issue please feel free to contact me if you have recently been terminated or recieved an 8210 letter. Stuart Meissner Esq. Managing Partner Meissner Associates 212-764-3100 Note: New York based Meissner Associates is a nationally recognized employment law firm focused on the unique employment issues within the securities industry which is overseen by FINRA. The firm also represents SEC whistleblowers before the SEC, investors and securities professionals before FINRA arbitration panels and securities professionals in enforcement proceedings, as well as institutional and retail investors worldwide in recovering improper investment losses and protecting the employment rights of employees in the securities industry in FINRA arbitration and AAA Arbitration. Managing member Stuart Meissner is a former Assistant District Attorney in Manhattan and Assistant New York State Attorney General in the Investor Protection and Financial Crimes Units. Call Meissner Associates, FINRA Attorneys Nationwide Representation for FINRA Arbitrations Disclaimer: Prior results cannot and do not guarantee or predict a similar outcome with respect to any future matter, including yours, in which a lawyer or law firm may be retained. The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation. Attorney Advertising  We have received numerous calls from reps informing us that firms are cracking down on brokers abusing dinner, computer or transportation expense reimbursement accounts. Reps are being terminated and U5 forms are being marked resulting in more and more FINRA 8210 letters and year long FINRA Enforcement investigations. Brokers are being impacted by this purge of what in the past was viewed as a minor issue which in the past resulted in a simple warning. Now there are no more warnings, rather violators are being terminated. As reported by the Wall Street Journal, firms from Wells Fargo to Fidelity have been discharging brokers for violating expense policies regarding after hour meals. Others have been discharged for violating computer reimbursement policies by returning computers after being ordered and keeping the reimbursement instead of reporting the return. Other altered times on food receipts so as to meet firm time requirements for dinner reimbursement policies.
Many brokers don't realize the serious nature of such actions as on the surface they have nothing to do with clients and securities. However the impact on one's career can be devastating and not to be taken lightly. U5 forms mandate that firms report to FINRA if any termination involves "fraud or the wrongful taking of property" (Question 7F on Form U5). Such actions clearly renders the rep eligible for such being checked off. Once such is checked off on a Form U5 it automatically triggers a FINRA investigation and a FINRA 8210 Letter. FINRA Investigations tend to last over a year even if they do not seek sanctions, which impacts upon one's ability to be hired by another firm as they will inquire if there is a FINRA investigation, and no firm seeks to employ a broker who may be suspended or barred by FINRA. It is essential to retain a qualified FINRA Attorney early on, as soon as the rep is terminated, so that the attorney may be able to convince the firm not to check off Question 7F and if they do, to respond properly, so as to minimize the likelihood that FINRA pursues the investigation or seeks sanctions. These matters are not something to handle on one's own as too often reps dig a deep hole that the attorney they later retain cannot dig out from. Finally, too many reps incorrectly believe that if they resign voluntarily before they are terminated that they may avoid any issues. However, departing before being fired does not resolve any of the issues raised. One's U5 will still be marked as your departing during an investigation and when the investigation concludes your U5 will be amended. For further information or assistance Contact Stuart D. Meissner Esq. 866-764-3100. Note: New York based Meissner Associates is a nationally recognized employment law firm focused on the unique employment issues within the securities industry which is overseen by FINRA. The firm also represents SEC whistleblowers before the SEC, investors and securities professionals before FINRA arbitration panels and securities professionals in enforcement proceedings, as well as institutional and retail investors worldwide in recovering improper investment losses and protecting the employment rights of employees in the securities industry in FINRA arbitration and AAA Arbitration. Managing member Stuart Meissner is a former Assistant District Attorney in Manhattan and Assistant New York State Attorney General in the Investor Protection and Financial Crimes Units. Call Meissner Associates, FINRA Attorneys Nationwide Representation for FINRA Arbitrations NEW OFFICE ADDRESS: 1430 Broadway, Suite 1802 New York, N.Y. 10018 Along with five other convenient Manhattan Meeting Locations and five other cities across the US and London Attorney Advertising Firms Pay Up When They Play Discovery Games in Promissory Note FINRA Employment Arbitration1/20/2017 Unlike most law firms we at Meissner Associates aggressively seek discovery in all our arbitration cases, so when we encounter a firm like Citizens Securities, the brokerage arm of Citizens Bank, along with their large well known law firm Greenburg Traurig playing games avoiding our discovery demands in arbitration we did what we normally do, we filed a Motion to Compel and fought for sanctions to send the right message from the start. After a hard fought oral argument, on December 21, 2016 we were notified (SEE DECISION BELOW) that we won our Motion and besides being ordered to produce a slew of documents and information to assist our client Citizens was ordered to pay $5000 immediately for attorney fees and for their delay, along with an additional $1,000 per day for every day they failed to produce the requested documents past the given deadline. No doubt the Order sent a message to Citizens and their attorneys that this was not a game and they are already behind the 8 ball in the arbitration in annoying the Chairmanof the FINRA Panel. While winning arbitrations involving promissory notes are not always easy, ones where the broker has valid claims which form the basis for unkept promises of books of business, as this one did, and other carrots to cause a broker to leave one firm to join another which turn out to be false and hurt their careers, are a solid basis to fight back, and it appears this is one of those cases. We continue on with discovery, but do so knowing that our careful arbitrator selection and screening of our client's claims appear to have been on the mark. If you were misled when being recruited and those false promises negatively impacted your career, you may have an independent claim against the firm for damages, in addition to being able to fight against collection of those golden handcuff promissory notes. As in our firm's motto - "one can be David and take on Goliath". Call Meissner Associates, FINRA Attorneys Nationwide Representation for FINRA Arbitrations 212-764-3100 * Prior results cannot and do not guarantee or predict a similar outcome with respect to any future matter, including yours  On Sept 1, 2016 the Hon. Judge Singh of the New York State Supreme Court Commercial Division filed his decision (including the transcript) in favor of Mr. Meissner's client, denying a defendant's Request for an Order to Show Cause to stop our pending multi-million dollar FINRA arbitration claim against him for for allegedly sexually abusing and harassing our client, a 57 year old female representative who has worked in the industry for 17 years and allegedly forcing her to perform oral sex on him while it is alleged he was her supervisor who had hired her in early 2015.
As previously reported on April 14, 2016 the Meissner firm, a nationally recogonized FINRA Arbitration Attorney firm, filed the claim in the FINRA arbitration forum. After Oral argument by Mr. Meissner where the Court summarily denied the defendant's arguments, the parties were sent back to FINRA Arbitration where the case will be heard. The Court held that since the defendant determined to place the issue arbitrability before the Director of FINRA, who then Denied their Motion, in favor of the Meissner Firm's client, and then filed an Answer on the merits, they had participated in the arbitration and cannot then seek a stay of the arbitration, but rather must continue to arbitrate the case before FINRA. Call the Meissner Firm Nationwide - 866-764-3100 for a free phone consultation if you have an employment dispute within the financial industry. Attorney Advertising Past results do not gurantee future outcomes  We often receive calls from registered representatives who were recently terminated for cause. Being terminated is a stressful situation which often leads many to act irrationally and not think clearly as to what they must do to prevent further damage to their career.
What kind of damage could a termination in the brokerage industry cause? Unlike other industries, the securities industry is highly regulated by FINRA. Everything is reported to FINRA and depending on what is reported it can mean the difference between not only having incorrect falsehoods on your Brokercheck for the rest of your career, but also being the subject of a lengthy FINRA Enforcement investigation, while at the same time trying to find a new job - not a pleasant circumstance to be in. Further, firms are known to exaggerate the reasons behind the termination whether intentionally, so as to try to keep the representative's clients, or simply due to laziness and having no one questioning the verbiage they choose to use or what disclosures are checked off in response to item 7F of Form U5 . What the firm chooses to write can makes all the difference to their future in the industry and impact their immediate income. DO TRY TO KEEP ANY EMAILS, TEXTS, WITNESS NAMES, OR OTHER EVIDENCE WHICH MAY ASSIST YOU IN DISPUTING THE FIRM'S VERSION OF TERMINATION, IF NOT ACCURATE - any such evidence could be critical to convincing the firm to alter the language they propose to include in the U5 and/or dissuade FINRA from taking enforcement action. DO CALL AN ATTORNEY IMMEDIATELY UPON TERMINATION - If the representative is on the ball and they engage a qualified and experienced FINRA attorney as soon as they are terminated, often times significant expense, damage and stress can be avoided. Firm's have 30 days from the date of termination for which to file the Form U5 so it is critical to act quickly as firms are more likely to make changes before they file the U5 than after. We have successfully engaged with both large and small firms so as to determine what language will be submitted as to the reason for the termination as well as what the firm's responses to question 7F (violation of investment related statutes, regulations, rules or industry standards, fraud or wrongful taking of property, etc) will be. When called early on in the process, we have on numerous occasions been successful in convincing the firm to remove affirmative responses to 7F and modifying and toning down the language for termination, pointing out inaccuracies of such language based on the evidence with the threat of a future significant potential defamation claim. As a result, countless representatives have avoided FINRA enforcement proceedings which could lead to sanctions, suspension or a bar, and many have avoided marks on their Brokercheck records impacting their ability to obtain new employment and clients. In addition, typically by engaging counsel early on in such fashion, many thousands of dollars is saved from having to defend against a FINRA enforcement proceeding and potential customer claims that could be triggered by the Brokercheck mark. Nothing entices Claimants' attorneys more in filing claims than marks on one's CRD. DO NOT ENGAGE YOUR PRIOR FIRM DIRECTLY - While you may think you can engage with the firm directly and save some money, such actions are foolish as you will only make life more difficult for any attorney you later retain to try to engage them as you would have made additional statements impacting their ability to alter the U5 DO CALL AN ATTORNEY IMMEDIATELY UPON RECEIVING A FINRA 8210 LETTER AND DON'T RESPOND ON YOUR OWN - If one happens to receive an 8210 letter from FINRA, once again it is important to retain a qualified FINRA attorney as soon as possible, so as to engage with FINRA before the representative gives any statement oral or otherwise. Those determined to handle such matters on their own soon learn that they were penny wise and pound foolish, as FINRA doesn't really care about apologies or the " I didnt know" defense. By engaging an experienced FINRA attorney early on in the process, who knows what FINRA does care about, it allows the lawyer to assess the situation and present the best defense possible, knowing what FINRA would need to prove based on the accusations at issue. However, it is much harder to properly defend someone who makes numerous statements to FINRA, effectively locking themselves in, or worse attending an OTR (On the Record) interview without counsel. If you follow the above guidance, it is much more likely that your termination will be a simple bump in the road, with no impact on obtaining a new position and no impact on your CRD. Further, if there is a FINRA investigation a FINRA lawyer will assist in seeing that it ends fairly quickly with perhaps as little as a simple non-reported FINRA letter of caution, like one of our recent clients received, after only $2,000 of legal time expended. It is common knowledge that FINRA looks at pro-se (self represented) broker who is without an experienced FINRA attorney like low hanging fruit waiting to be tarred and feathered - Don't be that low hanging fruit! Stuart David Meissner Esq. Free Phone Consultations Nationwide Affordable Representation Toll Free - 866-764-3100 |
AuthorStuart D. Meissner Esq. is an experienced FINRA attorney who has practiced law for over 27 years, including as a FINRA Attorney, Securities Regulator and Prosecutor. Archives
September 2022
Categories
All
|
RSS Feed