Theft, Unauthorized Fees and Commission Fraud, Misrepresentation and Negligent Supervision FINRA Arbitration and Litigation Attorney, Russell L. Forkey, Esq. 

December, 2011:

John Christopher Garner (CRD #2842338, Registered Representative, Charleston, West Virginia) submitted a Letter of Acceptance, Waiver and Consent in which he was barred from association with any FINRA member in any capacity. Without admitting or denying  the findings, Garner consented to the described sanction and to the entry of findings that when each of his customers invested in a mutual fund or annuity, he requested separate checks, one made out to the clearing firm and the other made payable to the bank at which Garner held a personal account. The first check represented the principal amount to be invested in the underlying product and was processed in the normal course through the member firm, and the other check purportedly represented Garner’s fee, which he endorsed and deposited into his personal account for personal use. The findings stated that when requesting and depositing the purported fee checks, Garner did not disclose to his member firm that he was collecting these payments from his customers, and the firm’s policies did not permit him to request or accept such payments. The findings also stated that Garner arranged for a customer to give him a check for approximately $15,000 and told the customer that he would invest the money on her behalf over time pursuant to a dollar cost averaging strategy, although the firm had a policy prohibiting registered representatives from personally holding customer funds for later investment. The findings also included that Garner never invested any of the approximately $15,000 for the customer’s benefit but converted the money for his own use.

FINRA found that upon discovery of Garner’s conversion, he paid the amounts taken as supposed fees and for the false investment strategy to his firm, which, in turn, provided the funds to the clients whose funds had been converted. (FINRA Case #2010022244401).