Wirehouse Brokers Who Took Client Data Fired by New Firms, Sanctioned by Finra
The Financial Industry Regulatory Authority has fined and suspended two former wirehouse brokers who tried to jumpstart their practices at new firms by taking client lists in violation of firm practices and SEC privacy rules.
The sanctions Finra imposed last week against former UBS Wealth Management USA broker Daniel Hee in Honolulu and former Morgan Stanley broker Joseph D. Olheiser in Mountain View, CA, underscore regulators’ growing impatience with unauthorized shifting of client profiles and firms’ growing fears of being hit with Reg S-P privacy violations for permitting new brokers to solicit from allegedly stolen lists.
Wells Fargo Advisors discharged Hee in 2019 after three years for concealing the source of his client lists. Raymond James Financial did the same to Olheiser after he had worked at the firm for just over three months, according to their BrokerCheck Records.
Hee, whose five-year brokerage career began in 2014 at UBS, has not been registered as a broker or advisor since leaving Wells. Olheiser, who has almost ten years of experience, is currently registered with independent broker Cabot Lodge Securities and its advisory affiliate. Neither could immediately be reached for comment.
Hee printed account documents for 100 customers and hand-delivered them to a broker at Wells before arriving there in January 2016 without UBS’s or the customers’ knowledge, according to a letter of acceptance, waiver and consent posted by Finra’s enforcement division.
Wells discharged him in February 2019 for “initially providing misinformation to Firm during internal investigation regarding source of client documents, belonging to another brokerage Firm, which were found on Wells Fargo premises,” according to a U5 summary on his BrokerCheck. Wells identified no customer harm, according to the summary, which did not address why Wells opened an investigation three years after Hee’s arrival.
Olheiser, who first registered as a rep almost ten years ago at MetLife Securities, moved to Raymond James in Sunnyvale, Calif, in February 2019 after almost three years with Morgan Stanley in Palo Alto, according to BrokerCheck.
In anticipation of his move to RayJay, he faxed detailed profile information on 20 Morgan Stanley clients without their consent, including account numbers, account objectives, investment time horizons, risk tolerances, and account balances, to Raymond James, according to the consent letter he signed. RayJay dismissed him after just over three months for “improperly sharing customer information from prior employer,” Olheiser’s BrokerCheck Report says.
Finra suspended each broker for ten days and fined each $5,000 fines, noting that they violated its “high standards of commercial honor” Rule 2010 and caused their member firms to violate the SEC’s Regulation S-P.
Hee and Olheiser accepted the sanctions with admitting or denying the regulator’s findings, according to their signed consent letters.
Finra earlier this month fined a former J.P. Morgan Securities broker $12,500 for printing about 500 customer names, account values and numbers in anticipation of losing his job due to a restructuring, and of selling some of the names to another broker.