FINRA Bars Ex-Cetera Rep Who Used Client Money to Buy Her Son Mutual Funds

 Commentary  April 07, 2022 at 07:44 AM  Share & Print

 
 

A former Cetera Financial Group broker has been barred by the Financial Industry Regulatory Authority from associating with any FINRA member firms in all capacities for allegedly converting over $40,000 in funds from three of her older Cetera clients and using the money to buy her son mutual fund shares, according to the industry self-regulator.

Without admitting or denying FINRA’s findings, Marianne O’Shee Smith signed a FINRA letter of acceptance, waiver and consent on Friday, consenting to being barred by FINRA. FINRA signed the letter Tuesday.

Smith first registered with FINRA in February 1987 as a general securities representative and broker for American Express Financial Advisors, according to her report on FINRA’s BrokerCheck website.

Smith became associated with Cetera Advisors in October 2016 as a rep and broker. In June 2021, Cetera filed a Form U5 Uniform Termination Notice reporting Smith was discharged in connection with its investigation of her deposit of customer checks into accounts maintained by a third party.

Cetera declined to comment Thursday. Vander Beatty, an attorney at New York law firm Mound Cotton Wollan & Greengrass who represented Smith, did not immediately respond to a request for comment.

Between February 2018 and April 2021, Smith allegedly converted $45,100 from her three older Cetera clients, according to FINRA.

Between Jan. 31, 2018, and Feb. 27, 2021, three Cetera clients gave Smith 10 checks totaling $45,100 made payable to a mutual fund company affiliated with the firm.

The clients directed Smith to use the checks to fund their mutual fund investments but Smith instead used their checks, “without their prior knowledge or consent, to purchase mutual fund shares for a family member of Smith,” according to FINRA.

A disclosure on Smith’s BrokerCheck report identified the relative as her son. It also cited an amount of $43,900 that was converted instead of the $45,100 cited in the AWC letter.

On each of the client’s checks, Smith wrote her family member’s mutual fund account number and the fund ticker symbol and sent the check to the mutual fund company to be credited to the family member’s account, according to FINRA.

After discovery of Smith’s misconduct, the clients were reimbursed in full, FINRA said.

By converting funds from three of her Cetera clients, Smith violated FINRA Rules 2150(a) (governing the improper use of client securities or funds) and 2010 (governing standards of commercial honor and principles of trade), according to FINRA.


European Compliance Association

European Compliance Association

-