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
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 firmís 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 individualís 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 relativeís name to reflect the individualís 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 individualís 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 relativeís name. Collantesí 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
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