Aug 8 The summer has come to an abrupt end for three brokers who were shut out of the brokerage industry after Wall Street's industry funded watchdog found they had engaged in outlandish schemes.
It has been an unusual week in which The Financial Industry Regulatory Authority (FINRA) barred three brokers in separate actions, all from firms that are household names. The brokers now join a list of 222 brokers whom FINRA barred as of June 30, according to a spokeswoman. The figure is on target to keep pace with the 429 brokers FINRA barred last year.
Included in the brokers' transgressions, according to FINRA: One broker falsified life insurance applications for his clients, even securing "fluid samples" from third parties to get insurance policies in his clients' names. Another broker forged a customer's signatures on two dividend checks and tried to deposit them to his own personal bank account. Another signed a customer's name on 21 documents, including one for buying a type of illiquid security.
All the brokers agreed to be barred from the securities industry in settlements with FINRA, according to regulatory documents, which also said none of the brokers admitted nor denied FINRA's allegations.
The cases demonstrate that not even the looming threat of losing one's livelihood can deter some egregious misdeeds.
FINRA said Tony Huang, a former broker for a unit of New York Life Insurance Company, took part in a scheme to falsify life insurance applications.
The regulator found that Huang forged signatures on applications and impersonated clients on telephone calls between 2011 and 2012. He even arranged for "fluid samples" from third-parties to be submitted in place of samples from his actual customers, FINRA said.
Neither Huang nor his lawyer could be reached for comment. New York Life terminated Huang after investigating his "business practices" and reported its findings to regulators, a spokesman said.
FORGERY AFTER FORGERY
FINRA found that Joseph K. Jayne, who worked for a unit of Ameriprise Financial Inc, forged a customer's signature on 21 documents between January 2009 and September 2012.
The customer knew about many of the forms and had authorized some of those transactions. But she did not know about a form that gave the broker permission to buy shares of a non-traded real estate investment trust (REIT), an investment that can be high fee and risky. The broker had not even discussed that investment with his client, FINRA said.
Jayne did not respond to calls requesting comment. An Ameriprise spokesman did not immediately return calls requesting comment. A regulatory document showed that Ameriprise fired the broker in April.
PERSONAL BANKING ACCOUNT
FINRA also barred John Osweiler from the securities industry this week, saying he forged signatures on two checks payable to an elderly customer. Osweiler consented to the entry of FINRA's findings, but later told Reuters he did nothing wrong.
FINRA said Osweiler, a former broker for a unit of Wells Fargo & Co, deposited one of the checks for $1,366 into his own personal banking account in March.
The regulator said his bank foiled a second attempt in mid-May when it would not let Osweiler deposit an $8,230 check, also made payable to his client, from his client's insurance company.
Osweiler repaid his client the amount of the first check immediately after his bank rejected the second deposit, FINRA said.
A Wells Fargo spokeswoman declined to comment.
"The decision is basically based on a bunch of lies, but I just didn't have the money to litigate," Osweiler said. (Reporting By Michael Leibel; Editing by Linda Stern and Suzanne Barlyn)