By Howard Haykin

CASE ONE:  TOBY MCGRATH … agreed to be barred from the industry to settle FINRA charges that she converted her member firm’s funds for her personal benefit.

Ms. McGrath, a resident of Woodbury, CT, entered the securities industry in September 2007 when she became associated with Prudential Annuities Distributors. Shortly thereafter, she obtained her Series 6 and Series 26 licenses. She was U5’d by PADI on 12/26/14. McGrath joined Lincoln Financial Distributors in May 2015, but was U5’d in June 2017 –around the time that FINRA published her case.

From 1/21/14 to 10/30/14, McGrath used American Express gift cards, originally purchased by PADI for business purposes, to purchase, without authorization, over $1,600 in goods and services for her personal benefit. [FINRA AWC #2014043921201]

CASE TWO:  JOHN REGAN … agreed to be barred from the industry to settle FINRA charges that he converted his member firm’s funds for his personal benefit.

Mr. Regan, a New York City resident, entered the securities industry in June 2005; he obtained his Series 7 license in June 2007 and his Series 63 license in 2008. Regan joined Guggenheim Securities in 2010 and remained with that firm until May 2014, when he was U5’d for material discrepancies in his T&E expenses. Regan is currently associated with another member firm as a non-registered fingerprint person. According to BrokerCheck, Regan disclosed 7 tax liens and 1 civil judgment during the period, 2008 to 2016,

From September 2012 to March 2014, Regan submitted 90 or so personal expense reports that intentionally mischaracterized around $25,000 in personal expenditures as business-related expenses.   [FINRA Case #2014041406201]

CASE THREE:  ERIC SNOW … agreed to be barred from the industry to settle FINRA charges that he converted his member firm’s funds for his personal benefit.

Snow, a resident of Clovis, CA, entered the securities industry in 2002 when he joined Horace Mann Investors, a FINRA-regulated broker-dealer; he obtained his Series 6, Series 63, and Series 26 (Investment Company Products/Variable Contracts Principal) securities licenses that same year. While associated with Horace Mann Investors, Snow was also employed by that firm’s affiliated insurance company. Snow remained with Horace Mann Investors until he was U5’d effective 6/30/16 for submitting false expense reports. Snow is not currently associated with a FINRA-regulated broker-dealer.

Over a 3-month period - from April through June 2016 - Snow cheated the insurance affiliate out of around $163 by submitting 4 false expense reports (and attached falsified receipts in support of his requests) in which he misrepresented that he had taken certain individuals to lunch for business purposes and attached falsified receipts in support of his requests.   [FINRA Case #2016050766701]

FINANCIALISH TAKE AWAY.    It's a tough call when, as reported in Case #3, a broker is barred for submitting $163 in phony expense reports. Especially when the broker has worked for the firm for 14 years!!! WHAT'S NEXT: a 6-month suspension for stealing office supplies? 

I don't know - I would hope there's more to this story than what FINRA is telling us. Which is why I recommend that FINRA explain the context within which the sanctions were levied - if, in fact, additional factors were considered in deciding on the reported sanctions.