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The Financial Industry Regulatory Authority separately barred two brokers who, among other infractions, allegedly treated elderly clients badly and then didn't cooperate with FINRA's investigations into their actions, according to the regulator.
Without admitting or denying the findings, John Joseph Cahill and Stephen Carver each signed a FINRA letter of acceptance, waiver and consent in which they agreed to be barred from associating with any FINRA member in any capacity.
Cahill signed his letter Dec. 11 and Carver signed his letter Dec. 10. Both letters were accepted by FINRA Jan. 2.
Cahill was a broker with Morgan Stanley from 1984 to 2005 and then again from 2009 to 2013, according to his profile on FINRA's BrokerCheck website. As part of a March 13, 2012 settlement with a customer who claimed Cahill made unsuitable investments from October 2008 to March 2010, there was a $42,100 payment, according to FINRA. Cahill was allowed to resign from the firm as of Aug. 21, 2013 due to "allegations relating to employee's compliance" with the firm's requirement to contact clients prior to executing securities transactions, according to BrokerCheck.
Cahill then joined Janney Montgomery Scott as a broker in 2013, but was discharged from that firm March 1, 2019, while he was under internal review over his receipt of funds while acting as a power of attorney for a client at his prior firm, according to BrokerCheck.
In a Uniform Termination Notice (Form U5) dated March 5, Janney reported Cahill was terminated for failing to report his fiduciary relationship with that former client. In an amended U5 on March 8, the firm reported its internal review of Cahill's receipt of funds while acting on behalf of that former client.
In the AWC letter, FINRA identified Cahill's former client as elderly. In December 2019, Cahill violated FINRA Rules 8210 and 2010 by "refusing to provide documents and information," as well as on-the-record testimony requested by its enforcement investigation into Cahill's "potential commingling and/or conversion of funds belonging to an elderly individual who was Cahill's customer at his prior FINRA member firm employer," according to the letter.
FINRA Rule 8210(a)(1) states that FINRA has the right to "require a … person associated with a member, or any other person subject to FINRA's jurisdiction to provide information orally, in writing, or electronically and to testify at a location specified by FINRA Staff, under oath or affirmation with respect to any matter involved in the investigation, complaint, examination or proceeding." Rule 2010 requires FINRA members to "observe high standards of commercial honor and just and equitable principles of trade."
