Rosemary McGinley Suspended From Association with FINRA
On February 1, 2017, Rosemary McGinley (CRD #2435216, Doylestown, Pennsylvania) submitted a Letter of Acceptance, Waiver and Consent (“AWC”) in which she was suspended from association with any FINRA member in any capacity for 10 business days.
In determining the sanction, FINRA considered the fact that Rosemary McGinley’s member firm separately suspended and fined her for the same conduct. Without admitting or denying the findings, McGinley consented to the sanction and to the entry of findings that she failed to follow her firm’s procedures when, in order to facilitate two separate wire transfer requests made by an individual posing as a firm customer, she accepted trade orders from an imposter via email and failed to obtain the customer’s verbal authorization to place the trades. The findings stated that a firm branch office received four email requests to transfer funds from the customer’s account to multiple outside bank accounts. Unbeknownst to the registered representative for the account, these requests did not come from the customer but from the imposter who had gained unlawful access to the customer’s email.
The findings also stated that after receiving the first request to transfer funds, the registered representative forwarded it to Rosemary McGinley for processing. Believing the imposter to be the customer, Rosemary McGinley replied by email, advised the imposter that the account had only $37,000 available to transfer, and provided an outgoing wire request form. After the required paperwork was completed and returned via email, Rosemary McGinley submitted it to the firm, which authorized the fraudulent transfer. The findings also included that the imposter’s second request to transfer funds was for $50,000. Noting that the account did not have enough funds available to complete the transfer, McGinley discussed options with other individuals in the office. She then contacted the imposter by email and recommended specific securities to liquidate so that funds would be available to satisfy the requested transfer. The imposter responded, again by email, agreeing to Rosemary McGinley’s recommendations.
FINRA found that the firm’s WSPs in effect at that time specifically prohibited registered persons from accepting trade orders via email, and required verbal confirmation before executing any written trade order. Nonetheless, Rosemary McGinley placed the trades as directed in the email and facilitated completion of the wire transfer paperwork, resulting in a second successful fraudulent transfer. After the imposter requested a third transfer, McGinley again recommended liquidating specific securities to fund the transfer and again accepted the imposter’s emailed acceptance of those recommendations. Rosemary McGinley placed the trades and processed the paperwork based on email communications alone, leading to a third fraudulent transfer of $60,000. After a fourth wire transfer request, Rosemary McGinley became suspicious that the requests were not genuine. This prompted the branch office to contact the firm’s compliance department. The firm subsequently investigated, determined that the requests were fraudulent, and reimbursed the customer the full $147,000 that the imposter had succeeded in transferring out of the customer’s account. The suspension was in effect from March 6, 2017, through March 17, 2017.
For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956 or by email at [email protected]. This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute, legal and compliance advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.
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