Finra Sidelines Two Brokers who Took Client Info to New Firms
The Financial Industry Regulatory Authority sent another reminder to brokers about the risks of taking customer data when changing firms.
The industry self-regulator fined and suspended a Lincoln Financial Advisors broker in Arizona and a breakaway broker who started his own registered investment advisor in Florida for allegedly taking non-public information about their former customers with them to their new firms, according to settlement letters finalized on Friday.
In the Arizona case, Andrew D. Perona was fined $5,000 and suspended for 10 business days for allegedly providing personal information for more than 100 Waddell & Reed clients to his new firm without consent from the firm or his clients. Perona resigned from Waddell in March 2019 and joined Lincoln Financial in Peoria, according to his BrokerCheck report.
(Waddell and Lincoln are both members of the Protocol for Broker Recruiting, which allows brokers to take names, phone numbers, addresses, emails and account titles for customers when moving among signatory firms, provided the customers consent).
In a separate action, former International Assets Advisory broker Nathaniel L. Goldenberg accepted a $5,000 fine and one-month suspension for allegedly taking personal information on at least four customers. Goldenberg, who had joined IAA in 2013, left in June 2020 and founded his own RIA, NextWave Advisors in Lithia, Florida, according to his BrokerCheck report and SEC filings.
Goldenberg was accused of improperly saving copies of new account documents containing the non-public information—including names, birthdates, social security numbers, and account numbers—on a thumb drive with the intention of using it at his new RIA, without providing notice to or obtaining consent from the customers, Finra said.
In addition to navigating the non-solicitation provisions of their own employment agreements, brokers are increasingly facing scrutiny from regulators over client privacy concerns, said Max Schatzow, a lawyer with New Jersey-based law firm Stark & Stark who was not involved in either case.
“It seems like Finra brings one or more of these types of cases every year as a message to the industry,” he said, noting its censure and fine against Kestra Financial last year over violations by a number of brokers that the firm had hired.
As is typical of Finra waiver letters, Perona and Goldenberg accepted the sanctions without admitting or denying the self-regulator’s enforcement findings.
Michelle Arbitrio, a White Plains, New York-based lawyer representing Perona, and Jeremy Bartell, a Washington, D.C.-based lawyer representing Goldenberg, did not respond to requests for comment on Tuesday.
Perona started his brokerage career at First Command Financial Planning in 1994, staying with the firm until joining Waddell in 2007. There are no disclosures on his BrokerCheck.
Goldenberg began his brokerage career with Gunnallen Financial in 2005 and moved to Chase Investment Services, a J.P. Morgan Securities predecessor, the next year, his BrokerCheck said. He was discharged from J.P. Morgan in November 2013 after admitting to “copying original signatures from initial account documents to additional account documents,” according to Finra and his BrokerCheck.
In a comment on the BrokerCheck disclosure, Goldenberg said there were no customer complaints or lawsuits involved in the matter. “I have always placed my clients’ interests before my own, however I did supersede a rule set by my employer and for that I apologize,” he wrote.