Enforcement Actions
Financial Industry Regulatory Authority (FINRA)
CASES OF NOTE
2012
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.
January 2012
Patricia Elizabeth Collantes (Supervisor)
AWC/2008013231504/January 2012
AWC/2008013231504/January 2012
Collantes failed
to supervise an individual,
who over eight years, misappropriated $749,978 from customers,
falsified account
records and engaged in unauthorized trades. In doing so, the
individual took advantage
of supervisory and systems lapses at the branch, deliberately
targeting the firm’s most
vulnerable customers.
Collantes was
responsible for reviewing
certain reports designed to highlight mismatches between new
account information and
information kept in a third-party database. The individual wrote
an explanation on the
hard copy of the report that failed to address mismatches and
Collantes accepted the
individual’s explanation without further review.
Collantes
was responsible for reviewing LOAs, which authorized the firm to make
transfers of funds,
disbursements and changes to account information, including
address changes. Review
of LOAs at the branch was typically limited to reviewing a
particular LOA for completeness
without reference to prior LOAs or account statements involving
the same account. In
following this approach, Collantes failed to ensure an adequate
response to suspicious
activity in customer accounts as reflected in LOAs. The findings
also included that the
individual used a series of LOAs to channel money from customer
accounts to herself. The
individual changed the residential account address on a fraudulent
account the individual
created in her relative’s name to reflect the individual’s
residential address. Transfers were
made from unrelated trust accounts to the fraudulent account
totaling $32,364.78. At the
same time, a check-writing feature was added to the fraudulent
account and a checkbook
was sent to the individual’s residential address. The transferred
funds were then disbursed
using the newly-issued checks. The individual again changed the
address for the fraudulent
account in her relative’s name. Collantes’
failure to ensure an adequate
response to suspicious activity in these accounts enabled the
individual to continue to
defraud firm customers.
Patricia Elizabeth Collantes (Supervisor): Fined $8,000; Suspended 4 months in Principal capacity only
Tags: LOA | In: Cases of Note : FINRA
Enforcement Actions
Tags
- AML
- Annual Compliance Meeting
- Borrowing
- Changes Of Address
- Checks
- Commissions
- Confidential Customer Information
- Due Diligence
- Elderly
- Electronic Communications
- Electronic Storage
- Embezzled
- Installment Plan Contracts
- Internet
- Life Settlement Contracts
- LOA
- Membership Agreement
- Money Laundering
- Mortgage
- OSJ
- Ponzi
- Private Placement
- Referral Fees
- Supervision
- Testing
- Unregistered Person
- Unregistered RRs
- Unregistered Securities
- Variable Annuity
- WSPs