The Financial Industry Regulatory Authority has fined a former Stifel rep $10,000 and suspended her for three months for not disclosing that she settled customer complaints away from the firm.
Jennifer L. Basey, who was registered with Stifel in Fort Myers, Florida, from January 2020 to November 2023, also exchanged 480 text messages with the complaining customers through her personal mobile phone, according to FINRA's order, discussing "securities-related business, such as investment recommendations, customer orders and trades, the customers' complaints and Basey's undisclosed payments to the customers."
On Nov. 24, 2023, Stifel filed a Form U5 disclosing that Basey voluntarily resigned "during an internal review into allegations that, among other things, Basey had settled customer complaints away from the firm."
Since Nov. 16, 2023, Basey has been registered with American Global Wealth Management in McDonough, Georgia, according to her BrokerCheck profile. Basey consented to FINRA's findings without admitting or denying them.
On March 24, 2020, Basey consented to FINRA's findings that she "falsified one customer's signature and forged two customers' initials on firm paperwork used to facilitate her customers' authorized transfers of funds," in violation of FINRA Rule 2010. Basey was suspended for two months in all capacities and fined $5,000.
Basey paid two customers a total of more than $1,300 to settle complaints without her member firm's knowledge or consent on three occasions between July 2021 and June 2023, FINRA found. As a result, Basey violated FINRA Rule 2010.
Stifel was initially unaware of these complaints or payments because Basey did not report them, the order states.
"Instead, Basey falsely stated in a November 2021 firm compliance questionnaire that she had not received any customer complaints in the past 12 months," according to the order.
Basey also communicated with these customers using an unapproved electronic communications channel not captured or supervised by the firm, causing Stifel to maintain incomplete books and records.
Payments to Married Couple
In July 2021 and October 2021, Basey paid two customers, who are a married couple with joint accounts, about $1,050 after the customers complained about losses from a preferred stock that Basey recommended, according to the order.
"In June 2023, Basey paid the same customers approximately $300 after the customers complained about a commission charged on a purchase of a fund that Basey recommended. Basey did not inform Stifel about the customers' complaints or obtain the firm's approval to settle the complaints," the order continues.
By using an unapproved communication channel, Basey caused Stifel to fail to capture or maintain these communications. She also failed to report the customer complaints she received to the firm, causing the firm to fail to keep a record of those complaints.
In an annual firm compliance questionnaire dated Nov. 14, 2021, "Basey falsely stated that she had not received any customer complaints in the past two months when she had received a complaint from the customers referenced above and made two payments to them," the order states.
Further, in 2021, 2022 and 2023, "Basey falsely attested on firm compliance questionnaires that she did not use text messaging on her personal device for business purposes," FINRA said, and she also "confirmed in the annual employee certifications during those years that she understood business-related texting was prohibited."
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.