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FINRA Bars Former Charles Schwab Rep for Stealing Social Security Funds

FINRA Bars Former Charles Schwab Rep for Stealing Social Security Funds. Broker-dealer, brokerage, financial services, RIA, SEC, Securities and Exchange Commission

The Financial Industry Regulatory Authority barred Ethan Christopher Martin, a former Charles Schwab registered representative, for stealing approximately $6,981 of a married couple’s Social Security payments.

FINRA says Martin converted and improperly used funds from the couple who held a joint brokerage account at the firm, one of whom was a senior customer. He was fired by the firm in September 2022 via a Form U5 termination notice filed by Schwab in October 2022.

According to FINRA, conversion is an “intentional and unauthorized taking of or exercise of ownership over property by one who neither owns the property nor is entitled to possession of it.”

Martin worked as a brokerage service specialist with Charles Schwab and was responsible for answering telephone calls from customers regarding, among other things, establishing direct deposits.

On May 26, 2022, the married couple contacted Martin at the firm’s customer service phone number seeking assistance with setting up a direct deposit of monthly Social Security payments into their joint firm brokerage account. That same day, Martin emailed the customers’ instructions for setting up a direct deposit. In the email, rather than providing the customers’ account number, Martin provided the account number for his own personal Charles Schwab brokerage account.

Between June and September 2022, Martin received three electronic deposits of the customers’ monthly Social Security payments into his personal firm brokerage account. Martin then converted and improperly used the customers’ funds for his own personal investments and expenditures.

“We are disappointed in the conduct of this former representative who did not adhere to the high ethical standards that we expect of our employees,” a Schwab spokesman said to Financial Advisor. “Once we discovered his actions, we terminated his employment, escalated the matter to FINRA, and made the clients whole.”

Martin violated FINRA rules which provides that “[n]o member or person associated with a member shall make improper use of a customer’s securities or funds,” and requires associated persons to “observe high standards of commercial honor and just and equitable principles of trade.” Martin also failed to provide information and documents requested pursuant to FINRA rules.

Martin consented to a bar from associating with any FINRA member in all capacities.

According to BrokerCheck, Martin’s only job in the industry was with Schwab for less than a year.

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