Deborah Dickson Kelley, of San Francisco, California, a stockbroker formerly registered with Stifel Nicolaus & Company, Inc., has been barred from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that she obstructed an investigation into allegations that she provided unauthorized gifts to a public pension portfolio manager and made misrepresentations concerning expenses that she sought to have reimbursed by her firm. Letter of Acceptance, Waiver and Consent, No. 2015046919201 (March. 28, 2017).
According to the AWC, Kelley was sent a letter from FINRA, based on Rule 8210, wherein Kelley was called upon to provide recorded testimony before FINRA personnel on March 2, 2017, regarding the allegations of her misconduct. Evidently, Kelley’s counsel reached out to FINRA personnel to indicate that Kelley received FINRA’s request; however, she would not provide recorded testimony at any time. FINRA found that Kelley’s failure to make an appearance for recorded testimony was conduct violative of FINRA Rules 2010 and 8210.
Kelley was charged by the Securities and Exchange Commission (SEC) in a Complaint which alleged that thousands of dollars in benefits were provided from Kelley and another broker to an official who served as director for a large pension fund between January of 2014 and February of 2016, in order for the official to help provide $2,500,000,000 worth of business to Kelly and another registered representative in a fraudulent pay-to-play scheme. United States Securities and Exchange Commission v. Kang, et al., Civil Action No. 16-cv-9829 (S.D.N.Y. Dec. 21, 2016).
According to the Complaint, the pension official received benefits including vacations, gifts, and money that had been spent on prostitutes and cocaine.
In exchange for this lucrative business, which netted Schonhorn and Kelley millions of dollars in commissions, the brokers provided Kang with tens of thousands of dollars in benefits, including:
- More than $50,000 spent on hotel rooms in New York City, Montreal, Atlantic City, and Cleveland.
- Approximately $50,000 spent at restaurants, bars, lounges, and on bottle service.
- $17,400 on a luxury watch for Kang.
- $4,200 on a Hermes bracelet for Kang’s girlfriend, at Kang’s request.
- $6,000 on four VIP tickets to a Paul McCartney concert in New Orleans.
- An extravagant ski vacation in Park City, Utah, including a $1,000 per night guest suite.
FINRA Public Disclosure reveals that Kelley was terminated by Stifel Nicolaus & Company, Inc. on August 10, 2015, based upon allegations that she furnished unauthorized gifts to the pension official and misrepresented her expenses. Kelley was later registered with Seaport Global Securities LLC from December 5, 2015, to December 21, 2016, where she was terminated after the firm received notice of her criminal charges.
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