Charles Henry Postel (also known as Chuck Postel) of Westlake Ohio a stockbroker formerly registered with Stifel Nicolaus Company Incorporated has been fined $5,000.00 and suspended from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon findings that the stockbroker effected unauthorized transactions in customer accounts. Letter of Acceptance Waiver and Consent No. 2018057286801 (Mar. 24, 2020).
According to the AWC, between October 31, 2017 and February 13, 2018, Stifel Nicolaus’ directives called for Postel to procure its written approval and the approval of its customers before cross transactions were executed. Stifel Nicolaus indicated that its cross transactions consisted of pairing sell orders with purchase orders in the same security for separate accounts. These types of transactions were not generally deemed appropriate by Stifel Nicolaus. The securities broker dealer’s Cross Trade Request form was applicable in these circumstances and called for acknowledgements to be provided by sellers and buyers of the securities. Postel was also required to complete an acknowledgement. Postel failed to comply with Stifel Nicolaus’ mandates.
The AWC stated that fifty-six pairs of cross transactions involving municipal securities had been executed by Postel for the accounts of his Stifel Nicolaus customers. In each situation Postel would set up a transaction where a customer’s municipal bonds were sold by Stifel Nicolaus acting as the customer’s agent. He would then set up Stifel Nicolaus’ purchase of the same bonds from a securities broker dealer for another of Stifel Nicolaus’ customers. Mark-ups for these transactions were determined by Postel. But the stockbroker failed to obtain the necessary acknowledgements from customers or the branch office personnel before initiating these transactions as Stifel Nicolaus required under its policy.
The AWC stated that Postel’s failure to deal fairly with respect to municipal securities transactions constituted violations of MSRB Rule G-17. On May 2, 2018, the stockbroker was discharged by Stifel Nicolaus based upon allegations of his violation of its policies pertaining to cross transactions.
