Peter J. Fetherston of New York, New York, a stockbroker formerly registered with Principal Securities Inc., has been charged by Financial Industry Regulatory Authority (FINRA) in a Complaint that alleges Fetherston’s misappropriation and conversion of funds belonging to two customers of Principal Securities. Department of Enforcement v. Peter J. Fetherston, Disciplinary Proceeding No. 2020065396501 (May 3, 2022).
According to the Complaint, between September 2019 and December 2019, when Fetherston was registered with Principal Securities, he had two customers provide him with $89,000.00 worth of checks under false representations. Fetherston allegedly had the customers believe that they owed commissions to him and that some of the $89,000.00 would go toward more investments for their account at the securities broker dealer.
FINRA alleges that no commissions were owed to Fetherston by the customers. None of the funds were purportedly invested on the customers’ behalf by Fetherston. Rather, the stockbroker allegedly took those checks and deposited them into his own account to pay debts and other personal expenses. For this reason, FINRA Department of Enforcement contends that Fetherston violated FINRA Rules 2010 and 2150(a).
The accusations against Fetherston also include failing to respond truthfully to the regulator when investigated for his handling of the customers’ checks. According to the Complaint, Fetherston was investigated by FINRA about the money, and the regulator required Fetherston to respond in writing about what he did with the customers’ funds. Fetherston allegedly provided false statements, including that the funds were provided to him by the customers so that he could pay his expenses. The regulator claims that Fetherston provided a fake document to support this false statement. That document purported to show that the customers gave Fetherston money for costs and expenses. The regulator contends that the customers never signed the document.
FINRA states that Fetherston also lied when testifying about his activities. Department of Enforcement contends that Fetherston’s misleading or false testimony, documents, and information show that he violated FINRA Rules 2010 and 8210. Fetherston is also accused of failing to respond fully to requests FINRA made in March of 2021 and April of 2021, in violation of Rules 2010 and 8210.
Department of Enforcement seeks sanctions against Fetherston, which may include a bar from the securities industry, based on the allegations in the Complaint.
FINRA Public Disclosure shows that on February 28, 2020, a customer initiated investment related complaint regarding Fetherston’s conduct was resolved for $89,000.00 in damages founded on accusations of Fetherston’s activities identified in the FINRA Complaint.
Fetherston was registered with Principal Securities between March 14, 2018, and January 24, 2020. He was discharged supported by allegations of his violation of firm policies concerning switches and replacements.
