An irreverent Wall Street Blog
Female Completed Continuing Ed for Male Supervisor
May 9, 2016
To say that a recent FINRA regulatory settlement - or two settlements, to be
precise - perplexes me would be a gross understatement. All of which prompted
today's BrokeAndBroker.com Blog, which you may call a diatribe,
jeremiad, tirade, or angry critique. However you view
my commentary, consider the facts for yourself and feel free to draw your own
conclusions.
First 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, Jennifer
Rose Montgomery submitted a Letter of Acceptance, Waiver and Consent ("AWC"),
which FINRA accepted. In the Matter of Jennifer Rose Montgomery, Respondent
(AWC 2015045341702, May 2, 2016).
The AWC asserts that Jennifer
Montgomery entered the industry in 2011 and was registered with Northwestern
Mutual Investment Services, LLC ("NM"), where she remained until March 2015.
The AWC states that Jennifer Montgomery had no
prior history of discipline by FINRA, the Securities and Exchange Commission,
any other self-regulatory organization, or any state securities
regulator.
Unsatisfied Continuing
Ed
In an excess of fairness to
FINRA, I offer a verbatim quote from the relevant portion of the Jennifer
Montgomery AWC:
FACTS AND VIOLATIVE CONDUCTIn December 2014, NM notified Montgomery's supervisor that he had not satisfied certain continuing education requirements. Using a password that her supervisor had given her, Montgomery registered for and completed the necessary coursework on her supervisor's behalf.As a result, Montgomery failed to observe high standards of commercial honor, violating FINRA Rule 2010.
FINRA
Sanctions
In accordance with the terms of
the AWC, FINRA imposed upon Jennifer Montgomery a
$5,000 fine and a 20-business-day suspension from association with any FINRA
broker-dealer in any capacity.
Bill Singer's
Comment
Jennifer Montgomery's supervisor was notified that
he had not satisfied certain continuing education requirements; thereafter, Jennifer Montgomery used her supervisor's password
and completed the necessary coursework. And just who is this supervisor? He is
not named in the Jennifer Montgomery AWC but is solely
referenced by FINRA as "Montgomery's supervisor" or "her
supervisor" (as noted in the quote above).
Now, you tell me, what do you
imagine went on here . . . as in, you know, really went on? I'm not asking you to overly exercise your
imagination. I'm asking that you use whatever industry experience you have
coupled with whatever life experience you have and try to fill in the void in
the AWC. I'm not saying that the Jennifer Montgomery AWC
isn't accurate. What I am saying, however, is that there seems to be something
missing between Point A: when her supervisor learns that he
had not satisfied his continuing education requirements; and Point
C: when Jennifer Montgomery took it upon herself to complete
her supervisor's coursework. Point B is the whole motivation
thing -- the "why" did she do it.
In Bill Singer's imagination,
maybe the supervisor paid Jennifer Montgomery to take
the coursework; or, maybe the supervisor made a veiled threat to Jennifer Montgomery that if she didn't do the
missing coursework her job or compensation might suffer; or, maybe Jennifer Montgomery liked the supervisor (as in
"liked" or as in "liked like") and, as such, was more than happy to help him
out; or, maybe Jennifer Montgomery asked
to be paid to take the missing coursework; or, finally, maybe Jennifer
Montgomery was a good soul and went the extra mile to help her supervisor. Obviously there's no basis for any of my
musings other than an active imagination and a lack of content and context in the Jennifer Montgomery AWC. FINRA's invitation to you and me to "fill in the blanks" is a disservice to the respondent, the industry, and the investing public. It is hide-and-seek regulation at its worst.
My curiosity, having been piqued,
by way of extra credit, I looked up Jennifer Montgomery's online FINRA BrokerCheck
record and found that she had voluntarily resigned from NMIS on March
31, 2015. The BrokerCheck record further notes
that:
SUBSEQUENT TO HER TERMINATION, FORMER REPRESENTATIVE PROVIDED SIGNED STATEMENT IN WHICH SHE ADMITTED TO COMPLETING ONE CONTINUING EDUCATION COURSE ON HER EMPLOYER/REPRESENTATIVE'S BEHALF BUT DENIED THAT HE ASKED HER OR DIRECTED HER TO DO SO.
We learn for the
first time from BrokerCheck (as it is not stated in the Jennifer
Montgomery AWC) that her supervisor was her "employer/representative" --, not merely, her
"supervisor" but, more relevant, also her "employer."
Further, the BrokerCheck record notes that Jennifer Montgomery denied that
her employer/representative/supervisor had "asked her or directed
her" to complete his coursework.
For the life of
me, I can't understand why the Jennifer Montgomery AWC failed to disclose
that her supervisor was also her employer. Similarly, the Jennifer Montgomery
AWC painfully silent as to her motivation in taking her
supervisor's coursework and simply presents her as having used his password and
completed the task; however, the BrokerCheck record asserts
that she denied that her supervisor asked or directed her
to engage in the violation at issue -- which leaves us with the inference that
she took the coursework on her own volition. Maybe that latter point isn't
earth shattering but you would sort of think that FINRA would have at least
spelled out that factor in the Jennifer Montgomery AWC, if for no other
reason than to dispel and implication that the supervisor had strong-armed his
subordinate or implored her to finish the continuing education
requirement.
Second Case In
Point
Why have I made such a
big deal about the undisclosed background of Jennifer Montgomery's supervisor
and her motivation in engaging in the cited misconduct? Perhaps what follows
will better explain my role as agent provocateur.
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, Jordan
Michael Montgomery submitted a Letter of Acceptance, Waiver and Consent
("AWC"), which FINRA accepted. In the Matter of Jordan
Michael Montgomery, Respondent (AWC 2015045341701, May 2, 2016).
SIDE BAR:Did you notice that the Jennifer Montgomery AWC was #2015045341702 and the Jordan Montgomery AWC is #2015045341701 -- as in sequential? And "no", neither AWC is referenced by name or number in the other!
The Jordan Montgomery
AWC asserts
that he had entered the industry in 2010 and was registered with Northwestern
Mutual Investment Services, LLC ("NM") as both a registered representative and
principal, where she remained until March 2015. The AWC states that Jordan
Montgomery had no prior history of discipline by FINRA, the Securities and
Exchange Commission, any other self-regulatory organization, or any state
securities regulator.
Unsatisfied Continuing Ed
In an excess of
fairness to FINRA, I offer a verbatim quote from the relevant portion of the Jordan Montgomery
AWC:
FACTS AND VIOLATIVE CONDUCTIn December 2014, NM notified Montgomery that he had not satisfied certain continuing education requirements. Montgomery did not complete the necessary coursework, yet later that month he received notice that the requirements had been satisfied. Montgomery learned that his assistant had registered for and completed certain coursework on Montgomery's behalf, using a password that he had provided, in violation of NM's policies. However, at that time Montgomery did not take the coursework himself, report his assistant's conduct, or take any other corrective action.As a result, Montgomery failed to observe high standards of commercial honor, violating FINRA Rule 2010.
FINRA
Sanctions
In accordance with the terms of
the AWC, FINRA imposed upon Jordan Montgomery a $5,000 fine and a
20-business-day suspension from association with any FINRA broker-dealer in any
capacity.
Bill Singer's
Comment
By way of extra credit, I looked
up Jordan Montgomery's online FINRA BrokerCheck record and
found that NM characterized his termination as a "Permitted to Resign" on March
31, 2015. The BrokerCheck record further notes that the
termination was based upon allegations that :
REPRESENTATIVE WAS PERMITTED TO RESIGN AFTER ALLEGATIONS WERE MADE INCLUDING THAT: HE FAILED TO REPORT THAT HIS ASSISTANT TOOK ON-LINE CONTINUING EDUCATION COURSES FOR HIM; AND, THAT REPRESENTATIVE ASKED HIS THEN-ASSISTANT TO PURCHASE TWO NON-VARIABLE POLICIES ON HERSELF AND HER HUSBAND AND THAT HE THEN REIMBURSED THE PREMIUMS TO THE ASSISTANT. REPRESENTATIVE DENIES HE REIMBURSED THE PREMIUMS TO HIS THEN-ASSISTANT AND STATED THE PAYMENT WAS A PRODUCTION BONUS. THE FIRM IS CURRENTLY CONDUCTING AN INTERNAL REVIEW OF THESE MATTERS.
Ummm . .
. you want to say it or should
I?
What the hell are
we to make of the fact that both Jordan and Jennifer have the same last name? Apparently, Jordan
is not Jennifer's husband because his BrokerCheck report refers to Jennifer "and her husband"
as the purchasers of two policies. Nonetheless, are Jennifer and Jordan brother
and sister, cousins, or some other family members? Is Jennifer married to
Jordan's brother or some other Montgomery family member? Or is it all just a
coincidence about the same last
names?
Also, what are we
to make of Jordan Montgomery's BrokerCheck report reference
to that oddball purchase of two non-variable policies with the subsequent
premium reimbursement a la production bonus? Why did no mention of that transaction find its way into either of the AWCs under consideration? Did FINRA reach any conclusion as to whether there was a payment made from Jordan to Jennifer?
Similarly, some 14 months ago, NM
permitted Jordan to resign in March 2015. Did the FINRA member
firm get past its 2015 stage of "currently conducting an internal review of
these matters," as asserted in Jordan's BrokerCheck
report? What, if any, conclusion did the firm reach?
Jordan is not Jennifer's husband but are Jennifer and Jordan brother
and sister, cousins, or some other family members? Is Jennifer married to
Jordan's brother or some other Montgomery family member? Or is it all just a
coincidence about the same last
names?
In the end we have
two AWCs addressing the same underlying act of misconduct but neither AWC references the other.Left unstated and unresolved is why Jennifer
completed Jordan's coursework or whether there was any compensation or other
consideration paid for that "voluntary" act. Sadly, there is not much substance in either AWC and we are left searching for explanations to explain not only what happened but why Jennifer and Jordan both received the same sanction. As today's blog title laments, about the only takeaway that FINRA offers in these two settlements is that a "Female Completed Continuing Ed for Male Supervisor." Could you just give us something to explain what happened here?
Just give me one thing
that I can hold
onto: