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.
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
Stuart 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.
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.