After Finra Opens Probe, Ex-Merrill Broker Leaves New Post
A long-time Merrill Lynch advisor in Boston who oversaw $1.4 billion in assets when he was fired last fall over alleged expense-account padding has been forced to leave his new job at an advisory firm after less than a month because of a regulatory investigation into the allegations.
Sandy Galuppo, who had worked at Merrill for 21 years and been ranked as a “top” Massachusetts advisor in several industry publications, left his job at Wainwright Investment Counsel on April 17, according to the Financial Industry Regulatory Authority’s BrokerCheck database.
The apparent cause? Finra on April 11 opened an investigation into Merrill’s regulatory U-5 report that it “separated” Galuppo from the firm on October 3, 2016, for “conduct including improper submission of personal expenses for reimbursement.” Finra is investigating potential violations that occurred between January 1, 2012, and December 3, 2015, according to its and the SEC’s regulatory database on advisors.
Details of the alleged malfeasance have not been spelled out in publicly available documents, and officials at Merrill, Wainwright and Finra declined to discuss the case.
Former colleagues of Galuppo have said that his firing was an example of overzealous compliance intervention by firms fearful of regulators who pounce on less-than-critical stumbles. If so, Finra’s opening of its probe is likely to fan those flames.
The industry-sponsored self-regulatory group wrote that it is investigating whether Galuppo violated Rule 2010 requiring member firms and registered reps to observe “his standards of commercial honor and just and equitable principles of trades,” a catch-all rule cited in virtually all its fraud cases. It also is investigating whether he violated or may have caused Merrill to violate Rule 4511, which requires firms to preserve accurate books and records for at least six years.
It is not certain, to be sure, that Galuppo’s less-than-two-week stint at Wainwright ended because of the Finra investigation, and neither Merrill nor Wainwright have been charged by regulators for related rule violations.
A person answering the phone at the firm, where Galuppo was a senior vice president, said no one was available to discuss his employment or whether it was aware of Merrill’s allegations.
Galuppo, a college hockey star who played one NHL game with the Florida Panthers in 1994 before joining Merrill, did not respond to requests for comment.
Sources in the Boston brokerage community said his team managed corporate stock plans with about $15 billion in assets, a level that led Barron’s to rank Galuppo as the top advisor in Massachusetts in 2013. He also was one of WealthManagement.com’s top 100 wirehouse advisors in 2016 and cracked the Financial Times’ ranking of top 400 advisors in 2014.