An irreverent Wall Street Blog
Another Office Girl Gets Slammed By FINRA
July 29, 2021
Given the sexual politics on Wall Street, a lot of men in positions of authority "get the girl to do it" when it comes to something that seems a tad dicey from a compliance or regulatory perspective. Later on, when whatever the girl did blows up and the regulators come a knockin', well the old boys' playbook tends to call the same audible. The girl was never told to do that. The girl acted on her own. No one knew. She went rogue. Of course, FINRA is too eager to buy into that crap, and the industry's women and minorities pay a disproportionate price for their relatively low-level infractions. Consider a recent FINRA regulatory settlement with another of the industry's female employees.
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, Chelsie Marie Hovingh n/k/a Chelsie Marie Jensen submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted.
In the Matter of Chelsie Marie Hovingh n/k/a Chelsie Marie Jensen, Respondent (FINRA AWC 2020066545301)
In the Matter of Chelsie Marie Hovingh n/k/a Chelsie Marie Jensen, Respondent (FINRA AWC 2020066545301)
https://www.finra.org/sites/default/files/fda_documents/2020066545301
%20Chelsie%20Marie%20Hovingh%20%28nka%20Chelsie%20Marie%20Jensen
%29%20AWC%20va.pdf
%29%20AWC%20va.pdf
The NRF
The AWC asserts that Chelsie Marie Hovingh entered the industry in 2017 as a non-registered fingerprint person ("NRF") with Raymond James & Associates, Inc., where her duties included contacting clients, updating client information, and obtaining cost basis information for clients.
One Call. One Customer. One Time.
As alleged in part in the AWC:
In January 2020, Hovingh impersonated a customer during one telephone call with Firm A. The customer asked Hovingh to assist the customer in obtaining the cost basis information for shares she transferred into her Raymond James account; however, the customer never authorized Hovingh to impersonate her.Therefore, Hovingh violated FINRA Rule 2010.
FINRA Sanctions
Bill Singer's Comment
I don't have a lot to say about Hovingh other than I find FINRA's sanctions to border on despicable. Clear enough?
The AWC does not indicate that Hovingh was represented by counsel, so we will infer that she represented herself in a pro se capacity during her settlement negotiations with FINRA.
What do we have here? We have a so-called NRF employee, which, in the FINRA community is pretty much viewed as just another "body." After all, the duties of an NRF are so menial and clerical as to not require registration.
Funny thing about NRFs is that they often tend to be women. Go figure, right? Then again, Wall Street always seems to find the right spot for females in the industry: secretaries, receptionists, back-office drones, Director of Human Resources -- you know, about every job that doesn't pay a commission and doesn't quite involve earning the big bucks. See for example: "Sexism On Wall Street: New Chapter, Same Book" (BrokeAndBroker.com Blog / February 8, 2019)
http://www.brokeandbroker.com/4427/sexism-wall-street/
http://www.brokeandbroker.com/4427/sexism-wall-street/
Wall Street's history of sexual discrimination and harassment should be -- must be -- known to many of the members of FINRA's Board of Governors. After all, some of them campaigned for election citing that very issue and promising to champion the cause of inclusion. Moreover, consider that upon interviewing for the very position of FINRA's Chair that Eileen Murray was embroiled in her own case involving alleged sexual discrimination "Former Bridgewater Co-CEO Eileen Murray Settles Pay Dispute With Hedge Fund / Her suit alleged the fund was withholding as much as $100 million in deferred compensation" (Wall Street Journal by Juliet Chung / Oct. 5, 2020)
https://www.wsj.com/articles/former-bridgewater-co-ceo-eileen-murray-settles-pay-dispute-with-hedge-fund-11601933138:
Former Bridgewater Associates co-Chief Executive Eileen Murray has settled her pay dispute with the world's largest hedge fund, she said Monday.Ms. Murray had filed suit against Bridgewater in July, alleging it was withholding up to $100 million in deferred compensation because she disclosed to a third party that she had a gender-discrimination dispute with the hedge fund. The suit described Ms. Murray as having claims against Bridgewater "based on gender discrimination, unequal pay, and breach of contract." . . .
What exactly do the women in power at FINRA think was going on with Respondent Hovingh?
The AWC asserts that Hovingh entered the industry in 2017 as an NRF with Raymond James & Associates, Inc., where her duties included contacting clients, updating client information, and obtaining cost basis information for clients. NRF: Talk about a horrific job title that seems designed to pigeonhole and minimize -- particularly a woman seeking a career on Wall Street. The bulk of what an NRF does is typically considered grunt work or drudgery assigned to a Gofer. Worse, in far too many businesses, the gofer is also known as the "girl," as in get your girl to do it, or why are you doing this when you have a girl? A generation or so ago, folks used to refer to some men, usually minorities, as "boys" but that pejorative seems to have fallen out of favor -- odd, isn't it, that girl still hangs in there.
It would be an interesting FINRA study to see what percentage of NRFs are women and minorities but, gee, FINRA funds so many worthless studies that this particular issue likely would be deemed too unsettling and probative. See for example "Dubious FINRA Study Finds Female Arkansas Prison Inmates Are Usually Poor And Financially Illiterate" (BrokeAndBroker.com Blog / July 24, 2020)
http://www.brokeandbroker.com/5343/finra-arkansas-inmates/
http://www.brokeandbroker.com/5343/finra-arkansas-inmates/
Getting back to NRF Hovingh, FINRA summoned all its powers to charge her with impersonating one customer during one telephone call. One customer. One Call. And all the weight of Wall Street's formidable self-regulatory-organization came down upon Hovingh's shoulders despite the fact that "the customer asked Hovingh to assist the customer" in obtaining the very information that was obtained. Probably, FINRA will insist that the "customer never authorized Hovingh to impersonate her" when the Raymond James NRF telephoned Firm A and apparently pretended to be the customer in order to get the cost-basis information. I'm not arguing the point. FINRA's allegation is likely right. That's not the point. There is a different between having the right to do something and doing the right thing; and throwing the FINRA rulebook at Hovingh was not the right thing to do. Not on the facts presented. Not given the reality of her role in the industry and at Raymond James. Consider this recent AWC for a sense of how disproportionate the sanctions are that FINRA imposed upon Hovingh, who was suspended for 10 more business days than Respondent Kuta below:
https://www.finra.org/sites/default/files/fda_documents/2017052215403%20Gilbert%20A.%20Kuta%20CRD%201084075%20AWC%20va.pdfFor 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, Gilbert A. Kuta submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. The AWC asserts that Gilbert A. Kuta was first registered in 1982, and from August 2009 to March 2020, he was registered with Capitol Securities Management, Inc. In accordance with the terms of the AWC, FINRA imposed upon Kuta a $5,00 fine and a 10-business-day suspension from associating with any FINRA member in all capacities. As alleged in part in the AWC, during the relevant period from December 2017 through June 2018:[K]uta effected at least 50 discretionary trades in numerous customer accounts. Although the customers knew that Kuta was exercising discretion in their accounts, Kuta did not have prior written authorization to do so from any of the customers. Additionally, Capitol Securities Management had not approved any of these accounts for discretionary trading.Therefore, Kuta violated NASD Rule 2510(b) and FINRA Rule 2010.
I'm hoping that you're a fair person and will agree with me that FINRA seems to have beaten up on and beaten the crap out of a lowly female employee who was not represented by a lawyer. I'm hoping that you too see that Hovingh engaged in no misconduct warranting both a $5,000 fine and a 20-business-day suspension.
No -- I'm not suggesting that Hovingh didn't show a lack of good judgment when she made the cited telephone call. Hell, I likely engage in numerous displays of poor judgment during a given day -- all the more so if you ask my wife, who was a federal prosecutor for some 33 years. A mere lack of good judgment, however, doesn't always warrant a fine and suspension. Sometimes a regulator should just issue a warning. You did this and you shouldn't have, and you should never, ever do this again.
Apparently there is little quality of mercy at FINRA when it comes to regulating the industry's lowly women employees. And just as apparently, FINRA seems to pull sanctions out of its ass because I can't reconcile imposing a $5,000 fine and a 20-business-day suspension upon an NRF employee who made one call on behalf of one customer to one firm but a $5,000 fine and a 10-business-day suspension was imposed upon a registered rep who made 50 discretionary trades for numerous customers in violation of company policy.
And folks wonder why I call FINRA's Board of Governors lackluster? Shame on you Board members for allowing this heavy-handed regulation to persist against the industry's women and minorities. Do you folks even bother to read your own regulatory docket? Do you ever intervene when equity and fairness demand that you speak up and speak out? Does the Hovingh AWC strike you as fair? I've issued the challenge to you. Now, what are you going to do about it? If my expectations are correct, you won't do jack.