The Financial Industry Regulatory Authority (FINRA) has permanently barred Andres Enrique Rojas (Rojas) and Giancarlo Ciocca (Ciocca), former Merrill Lynch Pierce Fenner and Smith, Inc. (Merrill Lynch) stockbrokers, for impersonation of a customer to obtain online access to the customer’s account to prevent the customer from detecting substantial losses. According to the recent decision of a FINRA Hearing Officer, Mr. Rojas was terminated by Merrill Lynch for “conduct including diverting a client’s account statements.” Mr. Rojas did not answer or otherwise defend the complaint. FINRA previously barred Mr. Ciocca for the same misconduct
The FINRA Hearing Officer found that while Mr. Rojas was working as a sales associate to another senior stockbroker at Merrill Lynch, Giancarlo Ciocca, telephoned the Merrill Lynch Call Center about a customer’s account. Mr. Rojas supposedly told the call center employee that he was helping a customer enroll in online access to his account. The hearing officer found that Mr. Rojas falsely stated that the customer was on hold on another telephone line. According to the hearing officer, Mr. Ciocca was actually the person on hold. Mr. Rojas then introduced Mr. Ciocca as the customer. The Hearing Officer then found that Mr. Ciocca impersonated the customer in order to obtain an account login and temporary password for the customer’s account which enabled him to then change the account preferences to prevent Merrill Lynch from sending the customer hard-copy statements. Mr. Ciocca then allegedly changed the email address associated with the account to one controlled by him so that he, not the customer, would receive all future electronic communications from Merrill Lynch about the brokerage account. The FINRA hearing officer concluded that the impersonation of the customer during the telephone call was designed to prevent the customer from detecting substantial trading losses, over $600,000, caused by Mr. Ciocca’s trading in the customer’s account. Mr. Ciocca was barred last year for his role in the fraudulent scheme.
FINRA requires its members and associate members to observe high standards of commercial honor and the just and equitable principles of trade in connection with the conduct of their business. Impersonating customers and other fraudulent conduct violates FINRA Rule 2010. The Hearing Officer reviewed the FINRA Sanction Guidelines and imposed the harshest sanction, a permanent bar from Association with any FINRA member stock brokerage firm in the future.
Merrill Lynch as an employer is vicariously liable for misconduct by its employees regardless of whether it was at fault. It also has a duty to supervise its employees and ensure that they do not engage in any conduct which may harm the public investors. By offering customers electronic access to change the default settings on the delivery of account statements and important client notifications, Merrill Lynch has left its clients vulnerable to identity thefts and fraud. If Merrill Lynch has not done so already, it should terminate that practice. Merrill Lynch should only allow clients to change addresses, change important client notification instructions and other authorizations in person or in writing after personal confirmation by employees specifically charged with that responsibility.
Have you suffered losses in your investment account due to your registered representative or 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 fraud, theft and/or other unauthorized and illegal 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 , 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.