Broker-Dealer Cited by SEC for Lacking Curbside Appeal

http://www.brokeandbroker.com/index.php?a=blog&id=423

On September 14, 2006, Anthony Dean Russell (Russell), a Branch Chief in the Office of Compliance Inspections and Examinations at the Securities and Exchange Commission’s (SEC’s) Atlanta Regional Office, saw a local news report about customer records left on the curbside of a home in Alpharetta, Georgia. The news story identified the records as belonging to J.P. Turner & Co., LLC (J. P. Turner), a national broker-dealer headquartered in Atlanta, Georgia. At the time, J.P. Turner had some 150 independent branch office in the United States staffed with nearly 500 registered representatives. This story clearly piqued Branch Chief Russell's interest.

On September 15, Russell told his immediate supervisors about the curbside customer records, and they all watched the video news report on the internet. Consequently, Russell and his staff were instructed to conduct an immediate examination of J.P. Turner. During the examination, the staff discovered that the customer records had been left outside the home of J.P. Turner employee John R. Exley. Exley was Branch Manager of an office that closed in 2001, and this position gave him access to physical copies of customer records, which were still in his possession in September 2006. By 2006, Exley was an employee registered representative in J.P. Turner’s Atlanta Office. Apparently, Exley had contracted with a company to pick up and destroy the records; but, the company failed to do so and Exley never followed up on it. The customer records remained on the curb for approximately two weeks. J.P. Turner had no involvement with the disposal contract.

You wouldn't think that such a snafu would invoke federal law, but you would be wrong.  I'm sure that Mr. Exley never expected that his failed attempt to swiftly dispose of customer records would invoke the ire of the SEC and get his employer in trouble, but he too was wrong.

READ BILL SINGER'S COMPREHENSIVE ANALYSIS OF THIS CASE:

http://www.brokeandbroker.com/index.php?a=blog&id=423