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September 26, 2005
BOMs Carry Burden in Broker Fraud", Mon., Sept. 26, 2005, 3:08 PM
Registered Representative, the industry magazine for staff of the broker-dealers, has just published an article by Susan Konig and Kristen French entitled BOMs Carry Burden in Broker Fraud.
"Branch office managers had better know what their brokers are up to, because if they don't keep them in line, the result could be more than just a slap on the wrist.
That's the takeaway from a Sept. 15 ruling against Raymond James Financial Services (RJFS), the firm's former president and an RJFS branch manager in a case involving failure to supervise former broker Dennis Herula. Herula is currently in prison after pleading guilty to federal charges of fraud.
In an initial decision, the SEC's chief administrative law judge ordered RJFS to pay a $6.9 million fine for failure to supervise Herula. It further charged J. Stephen Putnam, former president of RJFS, and David Ullom, Herula's manager, with failure to supervise, alleging that they knew about Herula's fraudulent activities. Putnam was fined $200,000 and suspended for 90 days while Mr. Ullom was barred from working at a broker/dealer for one year, and from acting in a supervisory capacity at a b/d for life. He was also ordered to pay a civil fine of $100,000."
I've had BOM responsibilities, and I can tell you it's no fun. You are always waiting for somebody's shoe to drop on your head.
In my case I hired the best compliance person I could after I left (RBC) Dominion Securities, where she checked my own work. I later left that firm and went to another, but I made sure that compliance officer followed me. Nothing is better for a good day at the office than a good night's sleep.
It's awfully draining to be sleeping with one eye open.
And when I went offshore, where I was dealing with HSBC Trading, I recall telling the CEO of that firm that Bahamas wasn't all sun, sand and sea. I told him that I remember my days in Canada where the significant compliance concerns I had with accounts could be counted on the fingers of one or two hands " say 5 or 10 out of 500 to 1000. But offshore, it was a case of fully half that worried me.
So, when I read about situations like at Raymond James (and others), I say to myself, There but for the grace of God go I".
Being a Branch Office Manager is a tough career.
Posted by Posted by Bill Cara on September 26, 2005 03:09:18 PM | Category: Cara Today in the Market