John Michael Leone, a non-registered associated person with Merrill Lynch, Pierce, Fenner & Smith, was barred from associating with any Financial Industry Regulatory Authority (FINRA) member frim in any capacity after consenting to findings that he attempted to convert customer funds. Letter of Acceptance, Waiver and Consent, No. 2015045761101 (Dec. 1, 2015).
According to the AWC, on April 16, 2015, while Leone was off work, Leone had remotely logged into his firm’s computer systems in an effort to initiate an unauthorized transfer of funds from a firm’s customer account to Leone’s personal firm account. The AWC stated that Leone had initiated the transfer of $4,500 from customer AL, without AL’s knowledge or authorization, to his personal account at the firm.
Leone had reportedly falsely specified in the firm’s systems that the customer had provided him with verbal instructions to effect the transfer. The AWC indicated that once Leone submitted the transfer request, the firm’s systems flagged the transaction for required review and approval from the firm due to the social security number associated with AL’s account and Leone’s account not matching. Leone then reportedly cancelled the transfer request. Notwithstanding the fact that the transfer was never processed, FINRA found Leone to have violated FINRA Rule 2010 for his attempted conversion of the customer’s funds for Leone’s personal use and benefit.
Firms and individuals, not surprisingly, are prohibited from unauthorized use of customer funds, borrowing of a customer’s securities or funds, forgery, non-disclosures or misstatements of material facts, and various deceptions and manipulations. Such conduct can also be found to violate criminal and other civil laws, and be subject to sanction from the federal and state government bodies.
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