South Florida Arbitration & Litigation Lawyer Blog
Registered Representative and Account Executive Fraud, Misrepresentation and Mismanagement FINRA Arbitration and Litigation Attorney, Russell L. Forkey, Esq.
March, 2012:
Francis Xavier Bice (CRD #3016365, Registered Representative, Manhasset, New York) submitted a Letter of Acceptance, Waiver and Consent in which he was fined $10,000 and suspended from association with any FINRA member in any capacity for two years. The fine must be paid either immediately upon Bice’s reassociation with a FINRA member firm following his suspension, or prior to the filing of any application or request for relief from any statutory disqualification, whichever is earlier. Without admitting or denying the findings, Bice consented to the described sanctions and to the entry of findings that he solicited customers for orders to buy or sell securities for which his firm did not have a research opinion. The findings stated that Bice was aware that the firm prohibited its registered representatives from soliciting transactions in securities for which the firm’s research department did not have a research opinion without prior supervisory approval. Rather than obtaining the necessary supervisory approval prior to soliciting the transactions, Bice mismarked orders for these transactions as unsolicited orders when, in fact, they were solicited. The findings also stated that by mismarking the orders and by falsifying records his firm maintained, Bice engaged in conduct that was inconsistent with his obligations by causing his firm’s books and records to be inaccurate. The findings also included that Bice serviced numerous customers whose account balances with the firm averaged less than $25,000 on a quarterly basis. Bice understood that his firm would impose a low balance fee on such customers, and that the firm would not pay him commissions on trades he executed for customers whose aggregate household account relationship with the firm averaged less than $100,000 quarterly. To avoid the firm’s minimum balance requirement, Bice encoded certain unrelated customers’ accounts in the firm’s books and records in such a way that the smaller accounts would appear on the firm’s internal-use-only records as part of a household that had an aggregate account relationship with the firm valued at $100,000 or more each quarter. By intentionally miscoding certain unrelated customer accounts in order to make them appear to be part of a single household relationship on the firm’s internal books and records, Bice thereby caused his firm’s books and records to be inaccurate. FINRA found that Bice effected numerous transactions in several customers’ accounts on a discretionary basis. These customer accounts were not designated as discretionary accounts and none of the customers had provided Bice or the firm with written authorization to exercise discretion in their accounts.
The suspension is in effect from January 17, 2012, through January 16, 2014. (FINRA Case #2009021082301).