Finra Suspends Do-It-Yourself Broker Over Unauthorized E-Mails
In another reminder of the need to follow firms’ customer communication guidelines, the Financial Industry Regulatory Authority has suspended a 22-year brokerage veteran for 45 days for using personal email and incomplete Excel-created customer account summaries to conduct business.
Michael E. Heath, currently an independent broker with Infinity Financial Services in Ladera Ranch, Calif., agreed to the suspension and a $12,500 fine without admitting or denying the self-regulatory group’s findings, according to a letter of acceptance, waiver and consent posted by Finra on Tuesday.
From June 2011 through January 2016, while working at independent broker-dealer First Allied Securities, Heath circumvented supervision of his communications with customers by using his personal e-mail to send them account documents and to discuss account performance and specific investments, “among other things,” Finra wrote in the consent letter.
The unsupervised activity caused First Allied to fail to comply with its recordkeeping obligations, Firna said in accusing Heath of violating its record-keeping as well as its “high standards” of conduct rules.
Heath, who was allowed to “voluntarily resign” from Securities America in March 2016 as a result of his policy-and-procedure violations, also made face-to-face customer presentations that violated the high-standards of commercial honor rule, according to the consent letter.
Specifically he created one- to two-page account summaries on Microsoft Excel over the four-and-a-half year period that did not “clearly distinguish between assets held at the firm and assets held away,” included unverified valuations of held-away assets, in some cases included total return figures without explanation of how they were calculated and did not denote that that they were being provided as a customer courtesy “for informational purposes only,” Finra said.
Heath affiliated with independent firm Securities America within weeks of leaving First Allied in early 2016 but was discharged after less than two month for failing to disclose his former firm’s internal investigation on his CRD update, according to his BrokerCheck record. The advisor commented on the webpage that he was told by his “caseworker” that the email issue was not “a reportable event” once Finra became involved.
The broker, who following his Securities America departure affiliated with Western International Securities from April 2016 through August 2018, has accumulated no customer complaints over his career, according to BrokerCheck. He joined Infinity, his current broker-dealer, the same month he left Western International.
Heath did not immediately respond to a message for comment sent via social media site LinkedIn.