Did You Hear the One About the Merrill Broker Who Became a Lead Generator?
Be careful of brokers bearing lists of leads.
The Financial Industry Regulatory Authority has fined and suspended a former Merrill Lynch broker for attempting to sell personal account and contact data about his former customers to a broker at a rival shortly after leaving the firm.
Ryan B. Wallace, who worked at Merrill’s Chandler, Ariz., branch from January 2013 to the end of April 2015, agreed to a five-month suspension and $10,000 fine without admitting or denying the charges, according to an accept, waiver and consent document posted Friday on the Financial Industry Regulatory Authority’s enforcement website.
Shortly before he left, Wallace took home names, phone numbers and social security information for around 100 of his clients, according to the settlement. Four months later he offered to sell the data to another broker at an unidentified firm for $10,000, Finra said. As a teaser, Wallace emailed a page of nonpublic information about 42 customers to the unnamed broker.
Wallace’s actions caused Merrill to violate the Securities and Exchange Commission’s regulation S-P that protects the privacy rights of clients. It also violated Finra’s ‘catch-all’ Rule 2010 that requires members to act with “highest standards of commercial honor,” according to the decision.
Wallace, who has not registered with another broker-dealer, could not be reached for comment. He began his brokerage career at Edward Jones in 2010, according to BrokerCheck, and also worked at American Family Insurance and Wells Fargo Advisors before arriving at Merrill.
The consent order did not say whether Wallace succeeded in his effort to peddle the stolen data. A Merrill spokesman and a Finra spokeswoman did not immediately respond to questions about whether Merrill was sanctioned over Wallace’s activities.
Cutting corners with client papers
In a second action involving a former Merrill employee last week, Finra suspended client associate Adriane Cagle for two months and fined her $5,000 for filling out information on client forms that had already been signed.
The finding, a warning sign to brokerage firm employees tempted to take client-consent shortcuts, said that in April 2016 in Peachtree, Ga., Cagle, “in an effort to avoid inconvenience,” filled out occupation information on a form a customer had signed.
That same month she also added her name as a witness to another customer’s pre-signed power of attorney document, and in July 2016 committed a similar witnessing violation, according to a separate accept, waiver and consent document published Friday.
Cagle took the shortcuts after she had been officially warned by Merrill in May 2014 about altering client documents, Finra said.
Merrill terminated her in August 2016 over the alleged misconduct.
Cagle, who is not currently registered in the securities industry, accepted the penalty without admitting or denying the findings. She did not respond to a message for comment.