The Department of Enforcement for the Financial Industry Regulatory Authority (FINRA) has brought disciplinary action to Kimberly Springsteen-Abbott of Holiday, Florida for improperly allocating funds. Mrs. Springsteen Abbott served at Commonwealth Capital Securities Corp. as a Chief Executive Officer (CEO), Chairperson, and Chief Compliance Officer (CCO) granting her control of funds at the firm. Mrs. Springsteen-Abbott had the authority to allocate the expenses to investment funds that were incurred in operating the business.
After hearing the evidence, the FINRA hearing Panel found that Mrs. Springsteen-Abbott misused investors’ funds for three years by improperly allocating unrelated business expenses to investment funds that she controlled.
The FINRA hearings proved that Ms. Springsteen-Abbott purposely used investors’ funds “as though they were her own” for her personal benefit and to the “investors’ detriment.” According to the decision, FINRA proved that “the practice of charging personal expenses to the funds was a way of life for Springsteen-Abbott and her husband, Hank Abbott. They regularly charged thousands of dollars of personal expenses on the same American Express credit card that they used for business expenses.” Multiple trips to New York, a vacation to Alaska, trips to Disney World, and expensive dinners were a few examples of Mr. and Mrs. Springsteen-Abotts inappropriate spending. The funds were only to be allocated for business purposes.
Mrs. Springsteen Abbott was able to justify some of the spending as business given her busy/work lifestyle. However, FINRA found the improper allocation of funds to be “unethical” and in violation of FINRA Rule 2010. Mrs. Springsteen-Abbott was fined $100,000, barred from association with any FINRA member in any capacity and ordered to pay disgorgement in the amount of $208,953.75 plus interest.
Stockbrokers have been known to engage in many types of practices which violate industry and firm rules, practices, and procedures. In order to protect customers from stockbroker misconduct, FINRA rules require broker-dealers Commonwealth Capital Securities to establish and implement a reasonable supervisory system. The implementation of the rules require supervisors to monitor employees to ensure they comply with federal and state securities laws, securities industry rules and regulations, and the firm, such as Commonwealth Capital Securities own policies and procedures. If broker dealers and/or their supervisors do not establish and implement these protective measures, they may be liable to investors for damages which flow from the misconduct. As a result, investors who have suffered losses because of their stockbroker’s unlawful or prohibited conduct can file a claim to recover damages against broker dealers like Commonwealth Capital Securities, which should consistently oversee its employees in order to prevent stockbroker misconduct.
Have you suffered losses in your Commonwealth Capital Securities investment account due to your stockbroker’s misconduct? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against stockbrokers for unsuitable recommendations, misrepresentations, and/or other unauthorized and 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. For over 40 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities, and investment law issues. The lawyers at our law firm are devoted to protecting investors’ rights throughout the United States and internationally! Please post a comment, call (800) 732-2889, send Mr. Pearce an email at firstname.lastname@example.org, and/or visit our website at www.secatty.com for answers to any of your questions about this blog post and/or any related matter.