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FINRA Suspends Advisor for Failure to Report Felony

FINRA Suspends Advisor for Failure to Report Felony. Broker-dealer, brokerage, Financial Industry Regulatory Authority, financial services, FINRA, RIA
FINRA Suspends Advisor for Failure to Report Felony. Broker-dealer, brokerage, Financial Industry Regulatory Authority, financial services, FINRA, RIA

The Financial Industry Regulatory Authority suspended Jacob David Frankel for failing to report a felony charge brought against him and the improper removal and retention of customers’ nonpublic personal information.

On Aug. 11, 2020, Frankel, who was then registered with Worden Capital Management LLC, was charged in New Jersey with two third degree counts of possession of a “controlled dangerous substance.” On Nov. 11, 2020, Frankel was charged with five additional third degree counts of possession of a CDS. These offenses each were punishable by a sentence of at least one year imprisonment and considered a felony for purposes of Form U4 amendments.

FINRA says the charges were subsequently dismissed when Frankel pleaded guilty to reduced misdemeanor offenses. Supposedly, Frankel was aware of all charges at the time they were filed but did not disclose the charges to his firm or via the filing of an amended Form U4 until Nov. 22, 2021, approximately one year late. Frankel also falsely certified in a firm attestation in September 2021 that he had never been charged with a felony. Therefore, FINRA says Frankel failed to timely disclose multiple felony charges and violated the organization’s rules.

Additionally, in October 2021, in anticipation of leaving Worden to join SW Financial, FINRA says Frankel improperly removed his and other registered representatives’ customers’ nonpublic personal information without the firm’s or the customers’ consent. Thereafter, in February 2022, in anticipation of joining Paulson Investment Company LLC—the firm Frankel registered through after resigning from SW Financial—Frankel improperly removed his customers’ nonpublic personal information from SW Financial without the firm’s or the customers’ consent.

According to FINRA, between October 2021 and February 2022, Frankel took hundreds of pages of documents, which contained the nonpublic personal information (including social security numbers, driver’s license and passport numbers, and account numbers) of over 200 different customers, several of whom were customers of registered representatives other than Frankel and from firms other than SW Financial and Worden. Frankel retained these documents until they were secured by Paulson in June 2022 after a manager inspected Frankel’s office, confiscated the documents, and reported the matter to FINRA.

Frankel consented to a four-month suspension from associating with any FINRA member in all capacities. No monetary damages were assessed as Frankel demonstrated an inability to pay financial sanctions.

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