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One Singular Registered Sensation In FINRA Chorus Line Settlement
November 30, 2015
The joyous sounds of a non-profit choral. Enter, stage left, a registered rep who serves in an uncompensated role as Treasurer and an executive director. Exit, stage right, a wad of cash. Lower curtain. FINRA lowers the boom.
Case In Point
For the purpose of proposing a settlement of rule violations alleged by the Financial Industry Regulatory Authority ("FINRA"), without admitting or denying the findings, prior to a regulatory hearing, and without an adjudication of any issue, Mark J. Ciriaco submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In the Matter of Mark J. Ciriaco, Respondent (AWC 2014042879701, November 20, 2015).
In 2008, Ciriaco was first registered with FINRA-member firm Securian Financial Services, Inc., where he remained until October 6, 2014, at which time the AWC asserts that following an internal investigation, Securian terminated his registrations. The AWC asserts that Ciriaco had no prior relevant disciplinary history.
The Chorus Line
The AWC alleges that in 2009, Ciriaco volunteered with a Nebraska-based non-profit choral organization. By December 2010, he was an executive director at the non-profit and, thereafter, became its Treasurer. The AWC asserts that throughout his affiliation with the choir, although Ciriaco was an authorized signer and debit-cardholder on the choir's bank accounts, he was nonsalaried and otherwise uncompensated .
One Singular Sensation
In early July 2014, the choir's board of directors reviewed the organization's bank statements and allegedly identified over 150 transactions constituting in excess of $31,000 in payments that were not related to the organization's operations - the AWC asserts that among the questioned payments were Ciriaco's home utility bills, grocery purchases, professional licensing fees, and cash withdrawals in amounts varying from $100 to $3,000.
Subsequent to the conduct of the banking review, on July 11, 2014, the board members confronted Ciriaco with their allegations about his unauthorized expenditures and demanded repayment. The AWC asserts that Ciriaco agreed to make repayment and in furtherance of that promise, he took out a loan to raise the necessary funds. At the end of July 2014, the AWC asserts that Ciriaco repaid $31,107.64 and, thereafter, the Board terminated his relationship.
Kiss Today Goodbye
The AWC asserts that Ciriaco's cited conduct constituted the wrongful conversion of the choir's funds in violation of FINRA Rule 2010. In accordance with the terms of the AWC, FINRA imposed upon Ciriaco a "permanent bar from associating with any FINRA member in any capacity."
Let us, at least, hope that Ciriaco did it for love.