Giancarlo Ciocca, a former broker employed at New York, New York-based Merrill Lynch, Pierce, Fenner & Smith Inc. (Merrill Lynch) submitted a Letter of Acceptance, Waiver and Consent in which he consented to the entry of the Financial Industry Regulatory Authority's (FINRA) findings that he impersonated one of his customers during a telephone call with a firm call center employee in order to obtain online access to the customer's account. The customer was not on the call. After Mr. Ciocca obtained online access to the account, he used that access to change account preferences so his firm would no longer send hard-copy statements to the customer and to change the email address associated with the account to one Mr. Ciocca controlled. FINRA also stated that the customer had sustained market losses in his account, and Mr. Ciocca undertook these activities to prevent the customer from learning of those losses. Mr. Ciocca allegedly created and sent the customer inaccurate account performance reports, which listed transactions that had not occurred and did not reflect the actual losses that had been incurred in the account. According to FINRA, Mr. Ciocca misrepresented to his firm that he was in compliance with firm policies prohibiting the creation of performance reports. FINRA also issued a request to Mr. Ciocca for an on-the-record interview. After being warned that a failure to appear would be a violation of FINRA Rule 8210, Mr. Ciocca's counsel informed FINRA that Mr. Ciocca would not appear for the interview as requested or at any other time. Consequently, Mr. Ciocca, of Coral Gables, Florida, was barred from association with any FINRA member in any capacity.
Broker-dealers must establish and implement a reasonable supervisory system to protect customers from broker misconduct. If broker-dealers do not establish and implement these protective measures, they may be liable to investors for damages flowing from the misconduct. Therefore, investors who have suffered damages due to their broker's attempt to conceal investment losses can bring forth claims to recover damages against broker-dealers like Merrill Lynch, which should consistently oversee its brokers' activities in order to prevent the above described prohibited conduct.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. Please see our Instablog profile (left column) for ways to contact us and get answers to any of your questions about this blog post and/or any related matter.