Gregory R. Bauer, a former stockbroker with Waddell & Reed, Inc., was permanently barred from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity after consenting to findings that he committed the fraudulent conversion of customer funds. Letter of Acceptance, Waiver and Consent, No. 2016051508101 (Oct. 13, 2016).
According to the AWC, from October 2004 to October 2013, during which time Bauer was a registered stockbroker with Waddell & Reed, he effected unauthorized withdrawals totaling $400,000.00 from his parents, WB and CB, who were customers of the firm.
Particularly, Bauer was responsible for providing service on the customer’s accounts. During the aforementioned time frame, the signatures of CB and WB were forged by Bauer on forms that Bauer submitted to withdrawal funds. Apparently, the submission of such withdrawal request forms led CB’s and WB’s securities to be sold in accounts held with the firm, where checks were subsequently issued to the customers.
The AWC stated that Bauer was able to obtain the checks while en route to the customers, and then deposited the customers’ checks into Bauer’s own bank account. Without authorization, Bauer reportedly utilized the customers’ funds to pay off his own personal debts. FINRA found that Bauer’s conduct was violative of Securities Exchange Act of 1934 Section 10(b), Rule 10b-5, as well as FINRA Rules 2010 and 2020.
FINRA additionally found that Bauer’s conversion of CB’s and WB’s $400,000.00 in funds constituted conversion. As such, FINRA found that Bauer’s conduct was violative of FINRA Rules 2010 and 2150, leading to his permanent bar.
Subsequent to Bauer’s termination from Waddell & Reed on October 2013, he became registered with H. Beck, Inc. from October of 2013 through September 28, 2016. However, he was terminated upon the firm learning of allegations of his misappropriation of customer funds while at Waddell & Reed.
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