Finra Bars Broker for Expensing ‘Phantom’ Client Events (Knicks, Kanye Concert, Steakhouses)
Brokers can easily stumble over the intricacies of business expense submissions, but the Financial Industry Regulatory Authority this week imposed a bar on a New York City man who it said worked hard at exploiting his firm’s expense reimbursement process.
Mark Charles Cohen falsified at least five submissions for client marketing events in 2012 and 2013 through a MetLife Securities “Co-Op Marketing Program” that subsidized up to 50% of pre-approved expenses, according to a settlement order published on Sept. 4.
“The expense reports were false because the corresponding preapproved client marketing events did not occur and therefore, Cohen did not incur any costs for the events,” Finra wrote. In at least one case—a Nov. 23, 2013, Kanye West concert where Cohen was granted approval to bring 24 people at an estimated total cost of $8,000—the broker did not himself attend the event, the regulator wrote.
Cohen, who has been a broker for 15 years and is currently registered with BCG Securities, could not be reached for comment at a number that the firm provided.
His methodology was straightforward but not simple, according to the settlement order.
Cohen would download PDFs of individual transactions from his online American Express account, use computer software to alter dates, dollar amounts and/or merchants involved in the transactions, then give the altered records to an assistant for submission to support the expense that MetLife’s compliance office had pre-approved.
The five events, including a “seminar” for 12 people at a New York Knicks-Orlando Magic game and dinners for more than 70 people at three steakhouses, generated reimbursement to Cohen of just over $14,600, according to the settlement offer.
Cohen accepted the Finra sanctions without admitting or denying the allegations. He has been barred “in all capacities from association with any Finra member firm” for “conversion” of property from his employer, falsifying documents and causing his employer to maintain false records.
MetLife Securities, which was purchased last year by Massachusetts Mutual Life Insurance Company and renamed MSI Securities, discharged Cohen in April 2014 for admitting that he failed to follow expense reimbursement policies, according to his BrokerCheck record. A MetLife spokesman declined comment on Cohen and on its subsidiary’s reimbursement policies.
After Finra began its investigation last year, Cohen denied the allegations. “Broker…was part of MetLife’s Co-op Marketing Program and complied with supervisor’s dictates regarding system submissions,” his comment on BrokerCheck says.
On a “lifestyle” website that had been linked to Cohen’s “finance professional” website, he exhibited a more freewheeling personal philosophy.
“Mark Cohen follows three important rules in finance and in sports,” he wrote. “Dress good, feel good, play good.”