Enforcement Actions
Financial Industry Regulatory Authority (FINRA)
CASES OF NOTE
2010
NOTE: Stipulations of Fact and Consent to Penalty (SFC); Offers of Settlement (OS); and Letters of Acceptance Waiver, and Consent (AWC) are entered into by Respondents without admitting or denying the allegations, but consent is given to the described sanctions & to the entry of findings. Additionally, for AWCs, if FINRA has reason to believe a violation has occurred and the member or associated person does not dispute the violation, FINRA may prepare and request that the member or associated person execute a letter accepting a finding of violation, consenting to the imposition of sanctions, and agreeing to waive such member's or associated person's right to a hearing before a hearing panel, and any right of appeal to the National Adjudicatory Council, the SEC, and the courts, or to otherwise challenge the validity of the letter, if the letter is accepted. The letter shall describe the act or practice engaged in or omitted, the rule, regulation, or statutory provision violated, and the sanction or sanctions to be imposed.
December 2010
Alan D. Schell
2009017694001/December 2010
Schell converted $17,410 from a bank customer by making unauthorized withdrawals from the customerís certificates of deposit (CDs). When Schell was confronted about the withdrawals, he admitted he had taken the money to fund an inner-city girlsí basketball team. Schell failed to respond to FINRA requests for information and documents.
Alan D. Schell : Barred
Tags:  Bank     |    In: Cases of Note : FINRA
Heather D. Pepo
2008014734701/December 2010
Pepo converted approximately $12,198 of her member firmís affiliated bank funds by crediting her personal checking and savings accounts without the bankís knowledge or authorization. The funds were the amount of fees that the bank had charged Pepo for servicing her accounts and she admitted to the bank that she had granted herself ďfee waiversĒ of the bank fees. Pepo failed to appear for FINRA on-the-record interviews.
Heather D. Pepo: Barred
Tags:  Bank     |    In: Cases of Note : FINRA
Kenya Reed
AWC/2009017054201/December 2010

Associated Person Reed participated in a scheme that involved causing fraudulent checks to be issued and drawn from her member firmís bank account. In connection with the scheme, Reed prepared fraudulent check requests and disbursed numerous checks drawn on her firmís bank account in various amounts under $1,000 and totaling over $290,000. The checks were made payable to entities that did not provide services to her firm; this was done under the guise that the entities were firm-authorized transfer agents and the payments were for related fees.

Reedís coworker provided her with fictitious billing invoices from such entities and, in turn, Reed initiated check requests through the firmís computer system to pay the fictitious fees; the check requests were processed and approved, and the checks issued and delivered back to the securities processing area where she worked.

Upon receipt of the checks, Reed gave the checks to her coworker, who provided them to a third party not employed by the firm; in return for initiating and processing the fictitious check requests, Reed received periodic cash payments from her coworker, totaling an estimated $10,000, for her own personal use.

The firm became aware of this matter when the New York City Police Department contacted it regarding an individual (a non-firm employee) who was taken into custody in an unrelated matter; the individual was in possession of certain of the firm checks issued as a result of the scheme. In addition, the firm investigated the matter, including questioning Reed, who admitted that she engaged in the above-referenced conduct; the firm then terminated Reedís employment.

Kenya Reed : Barred; Agreed to cooperate with FINRA in an ongoing investigation relating to this matter.
Tags:  Bank    Check     |    In: Cases of Note : FINRA
Bill Singer's Comment
Now that's a fascinating story.  You have to wonder why these folks thought that they would get away with this.
November 2010
Philip Rene Deroziere (Principal)
AWC/2009016976701/November 2010

Deroziere converted $10,000 from his member firm by endorsing and depositing a check made payable to the firm into his personal bank account without the firmís knowledge or permission. Deroziere also converted $750 from a nonsecurities customer by endorsing and depositing checks made payable to the customer into his personal bank account without the customerís knowledge or permission. Deroziere failed to respond to FINRA requests for information.

Philip Rene Deroziere (Principal): Barred
Tags:  Checks    Bank     |    In: Cases of Note : FINRA
Ryan Keith Hardy
AWC/2009018334401/November 2010
Hardy misappropriated approximately $8,585 from bank customersí accounts by closing their accounts and withdrawing their funds for his personal use, without their knowledge or permission. The Hardy informed the bank that he closed the accounts with the intention of opening new accounts so as to qualify for sales incentives, and maintained the customer funds in his desk at work and at his home. Hardy returned the monies to the customers whose funds he had still retained.
Ryan Keith Hardy : Barred
Tags:  Bank     |    In: Cases of Note : FINRA
Bill Singer's Comment
And there is still some doubt as to the pernicious nature of sales or account-opening contest in the financial services industry?
October 2010
Cislyn Louise Beckford
AWC/2009020374801/October 2010
Beckford misappropriated over $8,200 in funds belonging to her member firmís customer, from the customerís retail bank accounts, for her own personal use, resulting in her failure to observe high standards of commercial honor and just and equitable principles of trade. The retail bank reimbursed the customerís accounts for the missing funds and Beckford reimbursed the retail bank.
Cislyn Louise Beckford : Barred
Tags:  Bank     |    In: Cases of Note : FINRA
Nicholas Bryan Hemby
AWC/2010022588301/October 2010
While employed as a personal banker by a retail bank and registered with a member firm, Hemby withdrew and misappropriated $800 from a bank customerís account without the customerís consent.
Nicholas Bryan Hemby : Barred
Tags:  Bank     |    In: Cases of Note : FINRA
September 2010
Andrew Charles Callihan
OS/2007010731201/September 2010
Callihan withdrew, or caused the withdrawal of, a total of $19,000 from bank customersí checking or retirement accounts and deposited the funds into his securities account without the customersí knowledge and consent, and used the funds for some purpose other than the customersí benefit. Callihan failed to respond to FINRA requests for information and documents. (
Andrew Charles Callihan : Barred
Tags:  Bank     |    In: Cases of Note : FINRA
Richard Joseph Stratman
AWC/2009019569401/September 2010
Without permission and authority, Stratman  used a customerís bank account to electronically pay his own personal bills and expenses. Stratman took specific steps to misappropriate $4,713.50 but was only successful in converting $2,717.92 because the additional disbursements were prevented when the bank stopped payment on the transactions. The bank compensated the customer and Stratman reimbursed the bank to cover the amounts the bank paid to the customer.Stratman wrongfully converted approximately $2,717.92 from the customer and attempted to wrongfully convert an additional $2,000.
Richard Joseph Stratman : Barred
Tags:  Bank     |    In: Cases of Note : FINRA
Steven M. Oates
AWC/2010021601801/September 2010
Oates misappropriated $10,000 from the vault of his member firmís bank. Oates took the money from the vault without the firmís or bank branchís permission or authority. Oates did not observe high standards of commercial honor when he misappropriated funds from the branch vault.
Steven M. Oates : Barred
Tags:  Bank     |    In: Cases of Note : FINRA
Bill Singer's Comment

"Oates did not observe high standards of commercial honor when he misappropriated funds from the branch vault."

Now, seriously, that comment has to rank up there with some of the more phenomenal pronouncements that have ever issued forth from NASD and/or FINRA.  As much as I'd love to make some wise crack about the line, I'm not sure I could even approach the sublime idiocy of the statement. Like, duh?

August 2010
Dustin E. Polage
OS/2008014784001/August 2010
Without bank customersí knowledge or authorization, Polage used their personal bank account information to generate and activate ATM cards linked to their savings accounts and withdrew funds totaling approximately $36,102 from the accounts. Polage has not returned any of the funds to the bank customers or reimbursed the bank after it reimbursed the funds to the customers. Polage failed to respond to FINRA requests for information.
Dustin E. Polage : Barred
Tags:  Bank    ATM     |    In: Cases of Note : FINRA
July 2010
Blaine Carter Davis
AWC/2009016750801/July 2010
Davis converted $69,200 of customersí funds from his member firmís active assets accounts for his personal use. Davis wrote checks made payable to the order of ďcash,Ē enabling him to withdraw funds from customersí active assets accounts, and then deposited the withdrawn funds into his personal bank account. Davis forged the customersí signatures on the checks before negotiating them.
Blaine Carter Davis: Barred
Tags:  Check    Forgery    Banks     |    In: Cases of Note : FINRA
Jason K. Bronsky
AWC/2010021551101/July 2010
Bronsky used the bank ID and computer of the assistant branch manager at the bank where he was employed to create an automatic teller machine (ATM) card and personal identification number (PIN) for a bank customer without the customerís knowledge. Bronsky used the ATM card and PIN to withdraw a total of $2,511 from the customerís savings account for his own use and benefit.
Jason K. Bronsky : Barred
Tags:  ATM    Bank     |    In: Cases of Note : FINRA
Stephen A. Hancock
AWC/2009020044301/July 2010
Hancock obtained access to funds an elderly bank customer held in one or more bank accounts and caused the withdrawal of approximately $11,320 from the accounts. Hancock obtained a portion of the funds by causing early withdrawals from a time deposit account and used the funds for his personal benefit. Hancock returned the misappropriated funds by causing the deposit of $11,320 into the accounts from which the funds were taken.
Stephen A. Hancock : Barred
Tags:  Bank    Elderly     |    In: Cases of Note : FINRA
June 2010
Colleen Marie McMahon-Hill
2008016040401/June 2010
McMahon-Hill applied by telephone for bank-issued credit cards in the names of bank customers, without the customersí authorization or consent, and used the cards to make unauthorized transactions totaling approximately $5,642.97.McMahon-Hill acknowledged that she used the cards without the customersí permission and did not reimburse the bank for its losses. McMahon-Hill failed to provide FINRA with requested information.
Colleen Marie McMahon-Hill : Barred
Tags:  Bank         |    In: Cases of Note : FINRA
Bill Singer's Comment
Okay, so lemme see if I got this right.  All that a broker has to do is telephone a bank and request credit cards in the name of bank customers, and the bank just accepts the phone order and sends out the cards -- apparently not to the customers but to the stockbroker?  Wow, now that's going to help me sleep at night.
Gregory Ray
AWC/2008016200501/June 2010
Ray misappropriated approximately $368,657 from customers by opening bank accounts, for which he was the signatory, in firm customersí names. Through false representations, including false letters of authorization, Ray, without the customersí knowledge or consent, wired funds from the customersí firm accounts into the bank accounts that he had opened and used the funds for his personal use.
Gregory Ray : Barred
Tags:  Bank         |    In: Cases of Note : FINRA
Joel Barrett
2008014006701/June 2010

Without a bank customerís knowledge or authorization, Barrett

  • signed the customerís name on a check withdrawal form requesting a $25,000 check from the customerís account made payable to Barrettís friend, and the funds were later deposited into the friendís checking account; and
  • activated and linked an ATM card to the bank customerís savings account and used the card to withdraw $3,500 from the account for his own personal use and benefit.

Barrett failed to respond to FINRA requests for information and to appear and testify at an on-the-record interview.

Joel Barrett : Barred
Tags:  ATM    Check    Bank     |    In: Cases of Note : FINRA
Mark McEwen (Principal)
2008014940601/June 2010

McEwen converted $32,528.56 from a customer by falsely informing her that a check McEwenís member firm sent to her pursuant to a consent order with the Missouri Securities Division for unsuitable variable annuity sales to the elderly was sent to her by mistake and actually represented commissions the firm owed him. McEwen instructed the customer to deposit the check into her bank account and then make a check payable to him in the same amount; after the customer followed these instructions, McEwen cashed the check and deposited the funds into his personal bank account. McEwen converted an additional $11,000 from the customer by depositing checks intended for investment into his personal bank account and failed to purchase investments on the customerís behalf.

McEwen failed to appear for FINRA on-the-record testimony.

Mark McEwen (Principal): Barred
Tags:  Elderly    Check    Bank     |    In: Cases of Note : FINRA
Bill Singer's Comment
Lowlife.  I mean, really, what more needs to be said?
Michael Patrick Maser
AWC/2009017001301/June 2010
Maser liquidated funds in the customersí securities accounts with the customersí understanding that he would use the funds to purchase fixed annuities on their behalf. Without the customersí knowledge, permission or authority, Maser deposited the funds into bank accounts he opened in each of their names. He created passwords for the accounts which he used to instruct the bank to issue a $23,800 check payable to himself at his home address and to have the bank make monthly payments to each of the customers that were equivalent to the payments they would have received had he purchased the annuities for them.
Michael Patrick Maser : Barred
Tags:  Bank         |    In: Cases of Note : FINRA
Bill Singer's Comment
An oh-so clever scheme from an apparently intelligent guy who figured, what the hell, why not take a short-cut.  Alas, once the line is crossed, it is crossed.
May 2010
Ariel Pena
AWC/2009018511001/May 2010
Pena knowingly submitted false documentation to his member firmís affiliate bank in order to open customer accounts, thereby circumventing the bankís requirement that its customers provide written verification of residential address. The customers were non-U.S. citizens and, without written verification of address, the bank would not have opened accounts for these customers. Penaís tax accountant, who he had a referral relationship with, created false address verification letters for the customers on her companyís letterhead upon Penaís request, and provided the letters to Pena, who used these letters to open bank accounts for the customers and received at least $800 in commissions. Pena was responsible for ensuring that accurate documentation was presented to his employer and intentionally presented the false address verification letters to his employer in an attempt to avoid supervisory guidelines.
Ariel Pena: Fined $10,000; Suspended 6 months
Tags:  Bank         |    In: Cases of Note : FINRA
Bill Singer's Comment
In this day and age of terrorism, I'm not sure why FINRA gave this broker what I consider a slap on the wrist.  Either we are going to make a dedicated effort to verifying the source of funds and where we transfer money to, or we're not.  The next time you hear about an attempt to set off a bomb in Times Square, think about why we need to track the flow of funds.
William Frederick Brahe Jr.
2008014231001/May 2010
Without permission or authority, Brahe withdrew approximately $1,078,400 from customersí accounts and deposited the money into his own accounts for his own use and benefit.
William Frederick Brahe Jr. : Barred
Tags:  Bank     |    In: Cases of Note : FINRA
Bill Singer's Comment
These unauthorized bank withdrawal cases always get me -- I mean, seriously, how the hell does some shlub teller or rep manage to withdraw over $1 million without anyone noticing?
April 2010
Gregory Gerard Meyer
AWC/2008016397801/April 2010
Meyer withdrew approximately $553,000 from a customerís bank account by presenting withdrawal slips to bank tellers on which he wrote ďat the customerís requestĒ and deposited the funds into his personal brokerage account for his own use. In addition, Meyer misappropriated approximately $85,000 from another bank customer by depositing the proceeds of the sale of the customerís annuity into his personal accounts for his own use. Meyer exercised discretionary authority over a customerís securities account without her written authorization, did not speak with the customer in connection with every transaction, and did not obtain approval from his member firm to engage in discretionary trading. Meyer engaged in private securities transactions, for compensation, without prior written notice to, or prior written approval from, his member firm. The findings also included that Meyer failed to respond to FINRA requests for information and to appear for a FINRA on-the-record interview.
Gregory Gerard Meyer: Barred
Tags:  Bank     |    In: Cases of Note : FINRA
Bill Singer's Comment
Lemme see if I got this . . . if I want to steal a half of a million bucks from a bank, all I have to do is write "At the Customer's Request" on a deposit slip?  Wow!  Now, not that I'm getting the wrong idea or anything, but, umm, they keep extra deposit slips just sort of in those counters where the pens never work and all the ATM envelopes are missing, right?
Laura Anne Potts
AWC/2009018291401/April 2010
Potts used her access as a private banking associate to embezzle approximately $1,452,158 from customersí checking and certificate of deposit (CD) accounts. Potts fraudulently completed debit tickets, ranging from $800 to $68,000, to withdraw funds from customersí checking and CD accounts, falsely indicating that the customers requested the withdrawal: The customers neither authorized nor had knowledge of the withdrawals. Potts presented the debit tickets to bank tellers at her local bank branch and received cash back, which she used for her own personal use.
Laura Anne Potts: Barred
Tags:  Bank         |    In: Cases of Note : FINRA
Bill Singer's Comment
At least Woody Allen used a hold-up note that either said "I'm pointing a gun at you" or "I'm pointing a gub at you."  You don't get the movie reference?  Okay, see this http://www.youtube.com/watch?v=-UHOgkDbVqc  And when you watch the clip, please abt natural.  Yeah, abt!
February 2010
Cristobal L. Garcia
2008016441101/February 2010
In order to receive employee credit, Garcia completed and submitted false documents to enroll his member firm bankís customers in an online bill payment program without their authorization. Garcia failed to respond to FINRA requests for information.
Cristobal L. Garcia: Barred
Tags:  Bank     |    In: Cases of Note : FINRA
Jason David Fox
AWC/2009017154401/February 2010
Fox improperly refunded a member firmís bank affiliate service fees to customer bank accounts where such fees were never actually charged, and converted at least $52,000 of the refunded fees after first moving them to other bank accounts. The converted monies were repaid.
Jason David Fox : Barred
Tags:  Bank     |    In: Cases of Note : FINRA
Bill Singer's Comment
I don't know about you, but I'm getting the sense that banks don't exactly keep a close eye on things.  If you read some of the cases I've reported under "Banks" here, you may find yourself similarly ill at ease -- of course, nearly all of the reports in the Cases of Note at http://RRBDlaw.com involve folks who were caught, so there is that savings grace.  Still, it seems awfully easy to rip off a bank these days.

Consider the idiocy here.  The bank (unnamed for some reason -- as if FINRA should be protecting the "reputation" of such a bank) apparently lacks the ability to recognize that service fees are being credited to accounts that were never charged for such fees in the first place.  Think about that. What kind of lousy computer system would permit the payment of a  reimbursement  in the absence of proof that the reimbursed charge previously existed?
Robin Emily Katz
AWC/2009019057101/February 2010
While employed as a personal banker at her member firmís affiliate bank, Katz improperly obtained an automatic teller machine (ATM) card for a customerís account without authorization and misappropriated approximately $100,000 from the customerís account.
Robin Emily Katz : Barred
Tags:  ATM    Bank     |    In: Cases of Note : FINRA
Bill Singer's Comment
"Improperly obtained an automatic teller machine (ATM) card for a customer's account without authorization . . ." Umm, do you folks at FINRA think that you might, you now, perhaps, uhh, just put a bit more punch into the charge?  I mean, you know, I see where you phrase it that Katz only "misappropriated approximately $100,000 . . ." It's not like she intentionally defrauded the bank or stole any money . . . right? 

Geez.  Improperly obtained. Misappropriated. How nice.
Thomas H. Collop Jr.
AWC/2008016441801/February 2010
In his capacity as a bank employee, Collop converted a total of approximately $10,900 in bank funds by removing money from his cash box without the authority to do so. Collop processed a false buy/sell transaction in the bankís teller system in an effort to conceal that he had taken bank funds.
Thomas H. Collop Jr. : Barred
Tags:  Bank     |    In: Cases of Note : FINRA
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