Kelly Marvin Barnett of Sarasota Florida a stockbroker formerly employed by MSI Financial Services has been fined $15,000.00 and suspended for six months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that he executed trades in customers’ accounts without authorization and falsified account documentation in reference to his transactions. Letter of Acceptance Waiver and Consent No. 2015048320901 (May 11, 2018).
According to the AWC, on May 27, 2015, Barnett effected the sale of two exchange traded funds and the purchase of another exchange traded fund in the account of JN – one of Barnett’s customers. The AWC stated that two days later, Barnett executed a unit investment trust purchase and exchange traded fund sale in JN’s account. Throughout this period, JN apparently never furnished any written authorization to Barnett for purposes of Barnett exercising discretion in the customer’s account, and the firm did not approve the customer’s account for purposes of allowing Barnett’s discretionary trading.
The AWC stated that from January 1, 2014 to November 19, 2015, four more accounts were transacted upon by Barnett despite Barnett lacking any written authorization from customers or the firms. Barnett reportedly executed twenty five trades in the customers’ accounts without ever consulting with the customer’s regarding the trades before they were placed. FINRA found Barnett’s conduct to be violative of FINRA Rule 2010 and National Association of Securities Dealers (NASD) Rule 2010.
The AWC further revealed that Barnett falsified documentation in reference to the transactions effected in JN’s account. Particularly, Barnett created documents purporting to confirm that JN had provided approval of Barnett’s trading in the customer’s account on the days trades were entered. Yet, the AWC revealed that Barnett’s approval was impossible because JN had died prior to the days in which those trades were entered by Barnett. FINRA found that Barnett’s activities in that regard were violative of FINRA Rule 2010.
The AWC further detailed that between January 1, 2013 and November 19, 2015, blank but otherwise signed unit investment trust switch forms were maintained by Barnett in the firm’s files. The AWC stated that those blank forms had been utilized by Barnett nineteen separate times to place transactions in customers’ accounts. FINRA indicated that by Barnett completing the forms instead of the customers, the customers had not actually acknowledged the information relating to the unit investment trust transactions such as the costs, rationale and the investments that were being purchased and sold in their accounts. FINRA found that Barnett caused the firm’s records and books to be inaccurate in that regard; conduct violative of FINRA Rules 2010 and 4511.
Barnett was discharged from MetLife on November 19, 2015 founded on allegations that he exercised discretion in customer accounts and failed to abide by the firm’s policies concerning the use of customer signatures on account documentation.
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