(July 20 – 16:35 ET) – The Securities and Exchange Commission has settled an old administrative proceeding with broker-dealer Fahnestock & Co. Inc. a U.S. broker that also trades on the Toronto Stock Exchange.
The Commission alleged that from February 1993 through May 1994 Fahnestock and former branch manager William Bierlin Jr. failed to supervise Wendell Jeffrey Lee, a former registered rep in Fahnestock’s Jenkintown, Pa. branch. Lee misappropriated more than US$260,000 from the brokerage accounts of two former Fahnestock customers.
Fahnestock has consented to an order of censure for its failure to supervise Lee, it has been ordered to cease and desist from committing any future violations, it will pay a $20,000 penalty, and the firm has agreed to revise its internal compliance procedures.
Lee was convicted of felony forgery in connection with this scheme in 1995 and was sentenced to five years in prison. He also consented to a permanent ban from the securities industry. Bierlin consented to a cease and desist order, a $20,000 penalty, an 11-month ban, and a permanent ban from serving in a supervisory role.
-IE Staff