Finra Suspends Vet Who Printed Client List, Novice Who Bought CDs Unauthorized
A former J.P. Morgan Securities broker who was fired after telling the firm she had purchased a pair of brokered CDs without a customer’s authorization and a 30-year independent brokerage veteran who printed out a customer list before joining another firm agreed to industry suspensions this week.
The Financial Industry Regulatory Authority on Thursday accepted a settlement letter from Lauren Wing, a former J.P. Morgan rep in Los Angeles who in January 2019 bought two brokered CDs totaling $314,000 for a “senior customer’s brokerage account” without permission.
J.P. Morgan reversed the trades, reimbursed the customer a $135 trading loss and terminated Wing, who had been with the firm for a little over a year and had been a registered broker for six years previously at TD Ameritrade and Merrill Lynch.
Finra this week fined Wing $5,000 over the unauthorized purchases and suspended her for one month, although she has not re-registered as a broker since leaving J.P. Morgan. Wing could not be reached for comment. Her lawyer, Robert L. Hill in Carlsbad, Calif., did not immediately return a call for comment.
In an action against a more experienced broker, Finra on Wednesday imposed a 10-day suspension and $2,500 fine against Patrick J. Knox, a Pennsylvania-based independent advisor who first registered as a securities salesman 35 years ago.
Knox was sanctioned for printing out a list of his more than 300 customers at Lincoln Investment in June 2018, including identification data such as social security numbers, ahead of his plans to join another independent brokerage, according to the acceptance, waiver and consent letter he signed. In doing so and later sharing it with his new firm (identified on his BrokerCheck record as LPL Financial), Knox caused Lincoln to violate the SEC’s S-P privacy regulation.
Knox, who began his brokerage career in 1984 at First Jersey Securities and was affiliated with Lincoln Investment for 30 years, himself violated Finra’s wide-ranging Rule 2010 requiring registrants to observe high standards of commercial honor and just and equitable principles of trade, according to the letter Knox signed on Aug. 28.
Knox, who now works with LPL affiliate Capital Analysts in Jenkintown, PA, could not be reached for comment. Christopher Coss, his Bala Cynwyd, PA-based lawyer, did not immediately return a call for comment.
As is typical of Finra waiver letters, Knox and Wing accepted the sanctions without admitting or denying the self-regulator’s enforcement findings.
Finra suspended 415 individuals in fiscal 2019, down 12% from 2018 (while permanent bars were off 10%), according to its most recent annual report. The suspensions were well below the more 725 Finra had imposed annually in fiscal 2015, 2016 and 2017.
Finra enforcement head Jessica Hopper said in June that the numbers do not reflect many “informal actions” that attest to the self-regulatory group’s enforcement priority of returning funds to investors harmed by brokers. Firms paid $27.9 million in restitution to customers in 2019, up from $25.5 million in 2018, according to Finra.