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.
Aaron Joseph Coculo AWC/2011026065501/October 2011
Coculo converted funds from bank customer accounts while employed with his member firmís bank affiliate. Coculo ordered and intercepted automated teller machine (ATM) cards and withdrew funds from those accounts, which totaled approximately $5,500. Coculo improperly obtained ATM cards from relatives and effected unauthorized withdrawals totaling approximately $9,000; in total, Coculo misappropriated approximately $14,500 from the customer accounts without permission or authority from the customers or the bank. The transactions did not involve funds from an account held at a FINRA regulated entity.
Without the customer's authorization or knowledge, Scarcello effected an online wire transfer of $8,024.54 from a bank customerís account for his personal use and benefit.
Scarcello obtained an ATM card linked to the customerís account and used the card to make withdrawals totaling over $12,000 from the account, using the funds for his personal benefit without the customerís authorization or knowledge. When the customer discovered the funds were missing and confronted Scarcello, Scarcello executed an unauthorized wire transfer of $20,000 from the line of credit of another bank customerís account to the customerís account, thereby converting approximately $32,000 from two bank customersí funds for his personal benefit.
Scarcello failed to respond fully and completely to FINRA requests for information and to appear for an on-the-record testimony.
Frank J. Scarcello III : Not ordered to pay restitution to the bank customers because FINRA did not request an order of restitution; Barred
Palumbo activated ATM cards, linked them to bank customer accounts and affected unauthorized ATM withdrawals from the customersí accounts, which totaled approximately $36,895.
Palumbo did not have permission or authority from the customers or the bank to link the ATM cards to the customersí accounts or withdraw funds from the accounts. Palumbo effected a $1,000 direct cash withdrawal from another customerís account without permission or authority from the customer or bank. These transactions did not involve funds from an account held at a FINRA-regulated entity.
Page converted a total of $1,207,440.61 from retail customer brokerage accounts by arranging for transfers of funds from the customersí accounts, by way of one check and automated clearing house (ACH) debits, for payment of a corporate credit card account held in her name, without the customersí authorization.
Page provided false information to a Certified Public Accountant (CPA) who was acting on one of her customerís behalf with respect to some of the ACH debits made from that customerís brokerage account totaling $286,330.72, each debit having been made payable to Pageís corporate credit card account.
Page told the CPA that the debits were made to fund an outside real estate investment in which she had placed a portion of the customerís investment portfolio. Page fabricated an account statement purportedly demonstrating that the customer had an ownership interest in a particular REIT when no such ownership existed, and faxed the fabricated statement to the CPA. When the CPA sought further information about any dividends arising from the REIT investment, Page falsely explained to the CPA that while dividends were expected, they would not be forthcoming until the following tax year.
By deliberately deceiving one of her customerís appointed representatives in such a fashion, Page, in the conduct of her securities business, failed to observe high standards of commercial honor and just and equitable principles of trade.
Nicklas misappropriated $4,329.52 from his member firm. Nicklas wrote firm checks payable to himself, forged signatures on the checks and then deposited the checks into his personal trading account. Nicklas withdrew firm funds, without authorization, from automatic teller machines (ATMs)
Davies engaged in a pattern of check-kiting, in which he wrote checks totaling $1,070 from his personal bank checking account, maintained at another bank and payable to himself, deposited the checks into another personal checking account of his that was maintained at his firmís bank affiliate, even though he knew or should have known that he had insufficient funds in his account maintained at the other bank to cover the checks, and then immediately withdrew these funds via automatic teller machine (ATM) from that checking account at his firmís bank. Each of the checks was subsequently returned for insufficient funds.
Michael Jon Davies : Fined $5,000; Suspended 6 months
Janet A. McDermott (Supervisor) AWC/2010022100601/April 2011
McDermott effected transactions, including checks, debits and automatic teller machine (ATM) withdrawals, in the aggregate amount of approximately $11,403 on her personal account at her member firmís subsidiary, for which she did not have sufficient funds. McDermott opened a personal account at the subsidiary from where she began effecting transactions in amounts that she knew, or should have known, exceeded her available balance. This pattern continued, with McDermott causing transactions to occur on her account without sufficient funds until her account showed a month-ending deficit of $4,756, which included non-sufficient funds (NSF) charges of $2,130. The write-offs in the amount of $1,056 and a deposit of $3,700 reduced the deficit in her account to zero.
During a second period, McDermott again effected transactions on the account when she knew, or should have known, she had insufficient funds to cover the transactions. She failed to make a single deposit during this time to pay for the transactions, which caused her account to have a deficit of $7,049, which included NSF charges of $430.
McDermott's firm terminated her employment as a result of her conduct.
Jarred A. Milliner AWC/2010021764801/February 2011
Milliner was an ATM custodian whom both his member firm and a bank suspected of misappropriating funds from an ATM, and both began an internal investigation of his actions. Milliner denied taking any funds from an ATM, but in response to specific questioning, he admitted that he had misappropriated $100 from his teller drawer several months earlier. In connection with the internal investigation, Milliner made full restitution of the $100 and voluntarily resigned his employment.
Hoffmann converted funds totaling $900 from customersí checking accounts. Automated teller machine (ATM) cards were sent to Hoffmannís attention at the bank and he was photographed using the cards to make unauthorized withdrawals at ATM machines. Hoffmann signed customer names to signature cards to reactivate the inactive checking accounts without customersí or the bankís permission to do so. Hoffmann repeated this procedure when the customer accounts again became dormant because they were not used within 30 days of reactivation. Hoffmann failed to respond to FINRA requests for documents and information.
FINRA, FinCen, Networks, Authorities, Priorities, Statements, Guidance, AML, CFT, BSA, and NBFI (BrokeAndBroker.com Blog)http://www.brokeandbroker.com/6108/finra-fincen/Now we take that one step from the sublime to the ridiculous. FINRA actually believes that it is somehow furthering its regulatory mission when it publishes a Regulatory Notice about Fin... Read On