A Business Meal That Wasn't. A Job That's No Longer. A FINRA Regulatory Settlement That Hurts (BrokeAndBroker.com Blog)Texas Man Sentenced to 21/2 Years in Prison for Scheming to Create Fake Airline Employee IDs to Fraudulently Obtain Free Flights (DOJ Release)
From June 2015 to October 2015, Bell worked at the Phoenix-based Mesa Airlines, a regional air carrier. While employed at Mesa, Bell was provided access to free Spirit Airlines tickets as a benefit he was permitted to use only while employed at Mesa. To book a free ticket on Spirit, a Mesa employee entered their personal identifying information and a unique verification code.After Mesa Airlines terminated Bell's employment, from February 2016 to November 2017, he conspired with others to sell the stolen and unauthorized information of Mesa employees - including their names, dates of hire, and employee identification numbers - that were needed to book free flights on Spirit Airlines through Spirit's web portal for themselves and others.Bell unlawfully used his Mesa employee information to book 34 free flights for himself on Spirit Airline, which allowed him to fly interstate, including into and out of Los Angeles International Airport, despite the fact Mesa Airlines no longer employed him. Bell also admitted he and his co-conspirators manufactured and sold fraudulent Mesa employee identification cards for use by the fraudulent travelers.In total, the investigation into Bell and his co-conspirators has identified 1,953 flights that were connected to this scheme, flights that were booked for someone that did not match the Mesa Airlines employee whose information was used to book the free flight. The court found the loss to Spirit Airlines was approximately $150,000.The case's other defendants - Kamille Jemison, 28, a former Houston resident who subsequently relocated to the Beverly Grove district of Los Angeles; Alphonso Lloyd, 27, of Houston; Femi Felix-Ukwu, 40, of Hartford, Connecticut; Arnold Nichols, 32, of Houston; and Monique Ferguson, 32, of Houston - have pleaded not guilty to criminal charges in a superseding indictment returned in March 2019. They are scheduled to go on trial on April 13.
Respondent understands that this settlement includes a finding that he willfully omitted to state a material fact on a Form U4, and that under Section 3(a)(39)(F) of the Securities Exchange Act of 1934 and Article III, Section 4 of FINRA's By-Laws, this omission makes him subject to a statutory disqualification with respect to association with a member.
On September 7, 2017, while associated with Aegis, Almeida was arrested in Nassau County, New York, and charged with Criminal Possession of a Controlled Substance in the Fifth Degree, which is a Class D felony. He ultimately pleaded guilty to a misdemeanor charge, and the felony charge was dismissed. Although Almeida was aware that he had been charged with a felony, he did not amend his Form U4 to disclose that fact within 30 days, as he was required to do. Indeed, Almeida did not amend his Form U4 to disclose his felony charge at any point prior to resigning from Aegis in December 2017. Almeida amended his Form U4 to disclose the felony charge in December 2019, when he became registered through another FINRA member firm.
Although Dougherty was aware of the firm's WSPs, on November 26, 2019, he altered a mutual fund switch disclosure form after it had been signed by his firm customer. Dougherty did so by adding the potential disadvantages associated with a completed mutual fund switch transaction and then writing the customer's initials next to the changes.On December 2, 2019, when Dougherty's supervisor requested confirmation that the customer had reviewed and initialed the amended form, Dougherty contacted the customer and asked him to send an email confirming the changes. Dougherty then altered the email that he received from his customer so that it appeared to have been sent before he falsified the mutual fund switch disclosure form and submitted it to the firm for processing.Northwestern Mutual identified Dougherty's falsifications when his customer called and complained later the same day.
From October 1, 2018 through December 31, 2018, Western, on behalf of a customer, effected opening transactions in a stock option contract that resulted in the customer holding a position in the security that exceeded the applicable position limit of the options position for four consecutive business days. Further, the firm failed to establish and maintain a supervisory system, including written supervisory procedures (WSPs), that was reasonably designed to achieve compliance with option position limits requirements. . . .