The Financial Industry Regulatory Authority suspended an ex-UBS broker who allowed three wire transfers totaling $511,870 to be made from a client’s account to outside bank accounts after a hacker gained access to the customer’s account and tricked the broker into sending the money by posing as the client, according to FINRA.
The broker, William Darby, without admitting or denying the findings, signed a FINRA letter of acceptance, waiver and consent Nov. 22, agreeing to a 45-day suspension from associating with any FINRA member firm and a $7,500 fine. FINRA accepted the letter Tuesday.
During the October 2018 incident, Darby was “unaware that the emails were sent by an impostor” and directed a UBS sales assistant to make the wire transfers without speaking directly to the client first, violating the firm’s policy requiring customer verbal communication, the FINRA letter said. Darby also “on two separate occasions … falsely advised his sales assistant that he had received verbal confirmation for the wires from the customer.”
As a result of that lie, the sales assistant entered inaccurate information into UBS’ books and records, violating FINRA Rules 2010 and 4511. Rule 2010 requires member firms and their associated reps to “observe high standards of commercial honor and just and equitable principles of trade” in the conduct of their business. Rune 4511 requires each member to make and preserve books and records in conformity with Section 17(a) of the Securities Exchange Act of 1934 and Rules 17a-3 and 17a-4, FINRA noted.
Darby only made matters worse because, to fund the wire transfer requests, he “executed two sales of securities in the customer’s account, in a total amount of $525,896, without the customer’s knowledge or authorization,” according to the FINRA letter.