FINRA Suspends Broker for Falsifying Expense Reports
Commentary by Steven Lofchie
FINRA suspended a broker for submitting falsified marketing expense reports in order to obtain undue reimbursements.
According to the AWC, the broker submitted six expense reports falsely claiming to have incurred certain marketing expenses. FINRA found that the broker doubled the expected cost of those expenses to increase the reimbursement amounts. FINRA stated that, had the broker submitted accurate reports after actually incurring the expenses, the broker would have been entitled to receive only half of what was obtained. FINRA determined that, through this falsification, the broker received approximately $5,000 in improper reimbursements.
FINRA determined that the broker violated FINRA Rule 2010 ("Standards of Commercial Honor and Principles of Trade").
The broker consented to (i) a five-month suspension from associating with any FINRA member in all capacities and (ii) a $5,000 fine.
Commentary
There seems to be no logic to the sanctions that FINRA imposes on individual broker-dealer employees. How is it that the sanction in this case—the monetary penalty and the suspension—is barely more severe than the penalty imposed on a broker who costs elderly customers far more money?