Firm Fined $500,000 for Failing to Stop Thieving Employee
FINRA fined a large broker-dealer $500,000 for failing to supervise a rogue employee. FINRA claims a sales assistant used her knowledge of the firm’s “lax supervisory practices” to steal from vulnerable customers including the elderly and her own father. This bad actor misappropriated almost $750,000 form 22 customers by falsifying documents and transferring funds. FINRA alleges that the broker-dealer ignored certain red flags found in exception reports and inconsistent documentation.
OUR TAKE: This is the nightmare for compliance professionals. It’s hard enough to implement a reasonable compliance system. It will keep you up at night to consider that certain people with bad intent will seek out holes in the system in order to steal from clients.