| March 13
March 13 Brokers who impersonate clients while
in a rush to boost commissions or land accounts can pay a steep
The practice is common among many brokers, who are often in
a hurry to gather information from hard-to-reach clients or
complete transactions, say lawyers. But it is also against the
rules. Brokers who say it is a minor infraction may be surprised
by a much tougher view among regulators: they recently stiffened
penalties against one professional involved in a customer
impersonation scheme instead of lessening the punishment, as he
It is a harsh lesson for Timothy Golonka, a former insurance
wholesaler for Hartford Equity Sales Company Inc, a unit of the
Hartford Financial Services Group Inc. His alleged misconduct:
taking part in a plan to impersonate customers during calls to
their insurance companies.
Golonka, who worked in King of Prussia, Pennsylvania,
recently challenged sanctions imposed last year by the Financial
Industry Regulatory Authority, Wall Street's industry-funded
watchdog. But a FINRA appeals panel, in an unusual move,
FINRA's appellate body, the National Adjudicatory Council
(NAC), has increased sanctions in roughly one-quarter of its
decisions since 2008, according to a FINRA spokeswoman. The NAC
hears about 15 to 20 cases each year, including some it reviews
on its own. While stiffer penalties are not aimed at punishing
people simply for contesting their sanctions, they can send a
powerful message about conduct, say lawyers.
The boost in sanctions against Golonka is a strong reminder
to securities industry professionals about taking the most basic
rules seriously and avoiding shortcuts, said Richard Roth, a New
York-based securities lawyer who represents brokers. Shortcuts,
which can also include pasting copies of customers' signatures
on forms, may save time, he said, but they also reflect on a
Impersonating customers is fairly common, said Roth. A sense
on Wall Street that "everyone does it" fuels the behavior, he
Few brokers are caught. FINRA's database of disciplinary
cases reveals final orders in six such cases since 2009.
A spokeswoman for The Hartford said the company investigated
Golonka's actions and then terminated him. Golonka's lawyer
declined to immediately comment and did not return additional
calls. Efforts to reach Golonka, who left the securities
industry in 2011, were unsuccessful. It is unclear whether he
will appeal the case further to the U.S. Securities and Exchange
Golonka was a 25-year industry veteran who generated more
than $1 million in new business in 2008, according to
disciplinary opinions. Nonetheless, he is dealing with five
years of fallout from an impersonation scheme. A junior adviser
involved in the scheme, Jordan Arnold, last year was barred from
the securities industry, according to FINRA documents.
Golonka's problems began when a group of financial advisers
at a former Smith Barney branch hired him to review their
customers' life insurance policies and determine if they needed
new coverage, according to the FINRA appeals decision.
During the project, Golonka worked alongside two junior
financial advisers from the group who collected client
information, such as ages, policy numbers and death benefits.
But Golonka needed more details to conduct his analysis.
He could not get those details for customers who did not buy
policies from The Hartford. The junior advisers could not reach
those customers to gather information.
Golonka and the junior advisers then carried out a plan to
impersonate the customers in calls to the non-Hartford
companies. The junior advisers would later testify that Golonka
told them that brokers engaged in client impersonations "all the
time," according to the FINRA opinion.
They overlooked one glitch: their calls were recorded, a
standard practice at many financial services companies. Golonka
and Arnold, one of the junior associates, continued speaking to
each other after the insurance representative said goodbye but
was still on the line, according to the FINRA opinion. "You
sound exactly like an older woman," Golonka said to Arnold. "You
sounded like you were 82," he said in another call.
Golonka, in his public disclosure record, wrote that he was
on the call, but that he did not impersonate anyone.
Efforts to locate Arnold were unsuccessful. Her lawyer did
not return a call requesting comment. A spokeswoman for
Citigroup, which owned Smith Barney at the time, had no comment.
One call, nonetheless, caught the attention of an insurance
company's privacy officer, which notified The Hartford.
Pennsylvania insurance regulators fined Golonka $5,000 in
2009. Golonka argued to FINRA that the punishment was enough and
that he did not harm anyone.
FINRA's enforcement unit pushed to bar Golonka and appealed
to increase the sanctions by the hearing panel. Golonka also
appealed to lower the sanctions, but that move backfired.
He now faces a $20,000 fine, instead of $7,500, and an
18-month suspension instead of nine months, according to a March
The price is simply not worth putting a career on the line,
said Dev Modi, a securities lawyer in Florham Park, New Jersey
who represents investors and brokers. "You need to be thorough
and take your time," Modi said. "These are the things that will
come back to you if there's an action by a regulator," Modi