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.
Scarlett Loree Smith AWC/2010021373001/December 2010
Smith submitted false expense reports to her FINRA member firm and the firm reimbursed her for non-business-related expenses in the total amount of $2,971.57. Smith altered receipts and expense reimbursement requests for personal expenses to her firm to make it appear that she was meeting with customers in various locations.
Geraldine Ann Wert (Principal) OS/2008015086401/November 2010
Wert converted approximately $18,610 from an expense account her supervisorsí owned to pay for personal expenses. Wert took approximately $12,000 in unauthorized personal loans from the expense account, which she repaid shortly after withdrawing the funds. She forged her supervisorsí signatures on customersí new account forms and advisory agreements without her supervisorsí authorization or knowledge. Wert failed to appear and provide testimony as FINRA required.
Associated Person Hardy misappropriated $33,445.82 from her supervisorís personal checking account for her own personal use. Hardy misappropriated her supervisorís money by writing checks to herself as reimbursement for expenses her office never actually incurred. She misappropriated approximately $2,000 in cash a third party made to her supervisor. Hardy admitted to misappropriating the funds and paid $32,000 back to her supervisor in restitution, and the firm terminated her employment.
McLemore misappropriated member firm funds by using expense reimbursements for personal expenses, charging personal expenses to her corporate credit card and failing to pay the bills on the card. McLemoreís firm had previously sent her a memorandum about deficient and late payments on her corporate credit card, reminding her that she had agreed to use the card only for corporate expenses and to pay the balance in full each month. The credit card vendor notified McLemoreís firm that her account was delinquent with a balance of $6,442.20. McLemoreís firm terminated her employment and paid the credit card balance, including the charges incurred for her personal expenses, as it was obligated to do.
McLemore failed to respond to FINRA requests for information and to appear for an on-the-record interview.
Associated Person Bailey had responsibility for purchasing office supplies for her member firmís branch office with access to the firmís house account and charge card for an office supply store, which she used to purchase gift cards and office supplies for her own use and then submitted fabricated documents and invoices to the firmís accounts payable department that made the personal charges appear as if they were branch expenses. Bailey had access to branch managersí corporate credit cards, used the cards to purchase personal items and created fabricated receipts that made it appear as if the charges were branch office expenses. Bailey misappropriated approximately $50,000 from the firm in this manner. Bailey prepared and submitted fabricated documents in support of the expense reimbursement requests.
Lori Elizabeth Simpson AWC/2009017046701/July 2010
Associated Person Simpson wrongfully obtained $1,120.64 from a member firmís affiliated company, and then misused the funds for her own benefit. The firm and its affiliated company had established company guidelines wherein certain expenses were automatically approved if the expenses fell below a certain dollar threshold, and Simpson consistently submitted expenses below the firmís established threshold for automatic approval without a supervisor reviewing them. Simpson failed to respond to FINRA requests for documents and information.
Christopher William Shanahan AWC/2008014404801/May 2010
Shanahan misappropriated more than $30,000 from his member firm. Shanahan was issued a corporate credit card to pay for his business travel and other business-related expenses and, while use of the corporate credit card for personal expenses was prohibited by his member firm, Shanahan sought and received reimbursements for more than $30,000 of personal expenses to which he was not entitled. Shanahan submitted falsified expense reimbursement reports, causing his firmís books and records to be inaccurate.
Young made approximately $94,000 in unauthorized personal charges on credit cards that her employer firm issued to her and another registered individual for business use. Young failed to appear for a FINRA on-the-record interview.
Name Redacted by RRBDLAW 2008012102601/February 2010
Associated Person [name redacted] misappropriated $5,834.14 from his member firm by submitting inaccurate travel and expense reports, which caused his firmís books and records to be inaccurate. [name redacted] failed to appear for FINRA requestedon-the-record testimony.
Before my second career as a lawyer, I was the third generation of my family in the wine and liquor industry. In 1981, I started law school; and in 1982, I was hired as a law student in Smith Barney, Harris & Upham's Legal Department. After I graduated law school, I was a regulatory lawyer with the American Stock Exchange and then with the NASD (now... Read On