FINRA Gifting

FINRA Experiences Record Volume
February 13, 2019
Fraud costs commodities trader $15.7 million
February 28, 2019

Failure to disclose gifts could get you…fired! (And worse!)

In an industry where the regulatory bodies require transparency above all, no small gift goes unreported. That was the lesson learned by former Morgan Stanley Wealth Management Financial Advisor Martin Kirschner.

In a recent article Financial AdvisorIQ, Reporter Alex Padalka explained that Kirschner has been barred by the Financial Industry Regulatory Authority (FINRA) and fired by Morgan Stanley because he had allegedly accepted a gift from a client and did not disclose it. In addition, says FINRA, Kirschner also failed to disclose his power of attorney status with the same client.

Kirschner was discharged by Morgan Stanley in 2018 over allegations that he had “failed to disclose and/or obtain approval related to both a monetary gift the registered representative received from a client and accepting appointments to fiduciary capacities for the same client outside [Morgan Stanley].”

Kirschner declined to testify in connection with FINRA’s investigation about the alleged failure to disclose the gift and his “co-power-of-attorney appointment,” according to a letter of acceptance, waiver, and consent published by FINRA. But here is the rub – Kirschner’s record was otherwise clean.

He was not a newbie in the field. Kirschner became a registered representative in 1984 and joined Morgan Stanley in 2009. Aside from the employment separation from Morgan Stanely, he has no other disclosure records during his entire 33-year career. To date, Kirschner has not registered with another firm following his discharge by Morgan Stanley.

Hope it was a BIG gift because…

…These two missteps cost Kirschner his job and left a single, searing black mark on his career. It’s clearly spelled out that FINRA wants you to monitor, track, and report any exchange of cash, non-cash gifts, and gratuities. The Authority is paying special attention to conflicts of interest. Gifts, cash, or gratuities cannot exceed $100 per person per year when the exercise is related to the recipient’s employer or business.

The cost of non-reporting and potential conflict of interest could have been avoided. That’s where Patrina comes in. We’ve built our business based on helping organizations (and individuals) stay on the “straight and narrow” efficiently and cost-effectively. So, let’s talk. Call 212-233-1155 to ask about Patrina’s cost-effective, designated third-party services, our comprehensive, 8-module compliance solution, and compliant data capture & file storage, and records archiving specifically designed for the financial services community. Be smart. Be covered.

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