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FINRA Bars Former Hornor Townsend Broker for Breaking into Firm and Stealing Client Files

Following a hearing panel decision last week, the Financial Industry Regulatory Authority has barred former Hornor, Townsend & Kent advisor, Christopher Peter Tranchina.

Following a hearing panel decision, the Financial Industry Regulatory Authority has barred former Hornor, Townsend & Kent broker, Christopher Peter Tranchina, after he purportedly broke into his office and stole client files, hours after he was fired.

Tranchina worked in a branch office in Edison, New Jersey and was a member of a team headed by a senior representative, Jerry Goldberg. He also served as an insurance adviser for Penn Mutual Life Insurance Company, which owns Horner, Townsend & Kent.

According to the FINRA hearing panel decision, Tranchina and Goldberg had a shared business relationship, where Goldberg would provide business leads to Tranchina, who would then split any business with Goldberg that was generated from the leads.

Their relationship reportedly “deteriorated” over time, and according to Tranchina, their disagreements led him to make “the childish and regrettable decision” to purchase website domains that were similar to Goldberg’s business name, and have traffic redirected to his website.

After Horner, Townsend & Kent and Penn Mutual discovered the domain names, Tranchina was suspended and told not to return to the office, and the firms locked him out of their electronic systems and changed the lock on his office door.

About a week later, a Horner/Penn managing partner informed Tranchina that his contracts were terminated and that he was not to return to the office. He was told that any customer files that he shared with Goldberg, would remain with Goldberg.

According to his signed statement to FINRA, Tranchina believed that he could only expect 5 percent of his business back because Goldberg was on “approximately 95 percent” of the business he had generated during his nine-year tenure at the firm. He didn’t believe that the files would be returned to him, so he drove to the office and made his way inside.

Upon discovering that the locks on his office door had been changed, he stood on a chair in front of the door and used a broom to knock out the ceiling tiles, opening the locked door from the inside, FINRA said. Once inside, Tranchina said that he went into “panic mode” and “grabbed” as many files as he could off his desk.

He was confronted by a cleaning crew supervisor who threatened to report him, and when asked his name, Tranchina reportedly lied and said his name was “Mike.”

Tranchina claimed that the next morning, he realized he had taken files that belonged to Horner and Penn Mutual, although he said that he never accessed them. The managing partner who fired him, filed a police report on behalf of the firm accusing Tranchina of burglary, who was identified by the cleaning supervisor who saw a framed photograph that was left on his desk.

The police informed Tranchina that the firms would not press charges if he returned the stolen files. A few days later, he returned a large box with a “foot-high stack of documents” to the security desk.

While Tranchina claims that those were the only firm files he possessed, Horner and Penn Mutual disagreed, claiming that the “contents of the box did not match the description of the items provided by building security and cleaning personnel.”

The company filed a complaint-summons accusing Tranchina of committing “theft by unlawfully taking” and “criminal mischief by recklessly or negligently damaging property belonging to [Horner, Townsend & Kent].” Tranchina did not disclose this, or the subsequent court appearances, to his new broker-dealer or to FINRA.

At the FINRA hearing, Tranchina argued that he did not have to disclose the complaint-summons because he was not officially charged, and he was granted a conditional dismissal through a state program for those with no prior criminal history.

The FINRA panel found that Tranchina engaged in conversion and unauthorized access to firm information by breaking into his former firm’s offices and taking customer files. The panel also found that he failed to timely amend his securities industry registration form to disclose a criminal charge that resulted from his misconduct, all violations of FINRA rules.

In light of the bar, no additional sanctions were imposed for Tranchina’s violations, but he was ordered to pay $5,000 in administrative fees and transcript costs.

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