Sean Michael Refsnider of Haddon Heights New Jersey a stockbroker formerly registered with Ameriprise Financial Services Inc. has been charged by Financial Industry Regulatory Authority (FINRA) Department of Enforcement in a Complaint alleging that she converted funds belonging to a customer of Ameriprise. Department of Enforcement v. Sean Michael Refsnider Disciplinary Proceeding No. 2019063790901 (Apr. 28, 2020).
According to the Complaint, in July of 2019, Refsnider was assigned as the stockbroker for an elderly widow who held approximately $250,000.00 in an Ameriprise Account and $83,000.00 in an individual retirement account. The Complaint stated that beginning in July 2019, Refsnider started making suspicious changes to the customer’s accounts without the customer’s knowledge or authorization. He allegedly changed the customer’s account settings so that she would receive statements electronically despite Refsnider knowing that this was not a viable method for the customer to review her statements. The customer’s Ameriprise Account was then allegedly linked to two outside checking accounts after Refsnider suspiciously signed Customer A’s name to documentation.
The Complaint stated that on July 31, 2019, a $25,000.00 transfer was initiated from the customer’s Ameriprise Account to a bank account held in Refsnider’s name. The stockbroker used his spouse’s name as the recipient of funds from the customer. FINRA stated that on August 1, 2019, Refsnider visited the customer and procured a $20,000.00 check which he later deposited in his own account. FINRA alleged that the customer’s funds were used by Refsnider to make credit card and mortgage payments and for covering his personal expenses.
FINRA also alleged that by August 8, 2019, a debit card which Refsnider ordered without the customer’s permission had been used to deplete an additional $4,300.00 from the customer’s Ameriprise Account. Refsnider also purportedly made $17,317.00 in purchases of services of goods for his own benefit with the customer’s funds.
The Complaint stated that Refsnider falsely told Ameriprise that his transactions were legitimate when he was questioned about his activities. FINRA Department of Enforcement alleged that Refsnider took the customer’s funds without her knowledge or consent in violation of FINRA Rules 2010 and 2150(a).
The Complaint also stated that Refsnider failed to comply with the regulator when he was under investigation. On October 18, 2019, he was asked by FINRA to provide information and documentation which included information about his bank accounts and credit card statements. The regulator indicated that as of April of 2020, none of that information or documentation was provided despite Refsnider testifying in December of 2019 that he would produce the outstanding information. FINRA Department of Enforcement alleged that Refsnider violated FINRA Rules 2010 and 8210 in this respect.
Refsnider was terminated by Ameriprise on August 20, 2019 based upon allegations of him misappropriating a customer’s funds.
Customers who have had their funds stolen or misappropriated by their stockbrokers, or even by third parties, may be able to recover their funds by bringing an action against their brokerage firm.
Their liability arises from their unequivocal duty “to establish, maintain and enforce an adequate supervisory system to detect and prevent misconduct.” FINRA Rule 3012 regarding the establishment of a Supervisory Control System specifically requires all firms: to establish, maintain and enforce written supervisory control policies and procedures that, among other things, include procedures that are reasonably designed to review and monitor the transmittal of funds (e.g., wires or checks) or securities.