A former Raymond James & Associates compliance officer has been accused by Finra of doctoring internal reports to avoid having to do follow-up audit work on branch offices.
Vincent Joseph Storms changed reports filed by 60 RJA branches between March and November 2016 to negate any information that would have required him to investigate red flags uncovered by the questionnaires, according to an administrative complaint filed by Finra on Thursday.
Storms worked as a compliance associate at RJA between November 2015 and March 2017 after starting at the company in 2005 as a compliance intern, and was last associated with a Finra-regulated firm in October 2017, according to Finra.
As a compliance associate, Storms' main job at RJA was to conduct audits of branch locations and perform any follow-up work that arose from the audits, Finra said.
Storms, however, is accused of falsifying documents in a way to ensure that no follow-up work was required.
The alleged document doctoring worked like this: Prior to company audits, RJA registered reps at all branch offices were required to fill out questionnaires, partly to spot any problems that might require compliance officers to do follow-up work, according to Finra. The questions include whether reps have any outside business activities (OBAs), undisclosed accounts at other firms and LinkedIn profiles. Branches are also asked if they use third-party vendors to back up data in an effort to ensure the vendors are approved by Finra.
For example, if a rep reported any outside business activities, "the compliance associate was required to ascertain the nature of the OBA, have the representative complete necessary request forms and ensure that the firm had approved the OBA prior to the branch audit being marked as complete," the complaint said.
The software used for the system categorized each response to a question as a 1, 2 or 3. A response marked as a "2" required a follow-up by a compliance person, while a "1" or "3" did not.
Storms is accused of doctoring the master spreadsheet for responses taken from each branch office by changing scores of 2 to scores of 1 or 3, as well as deleting comments associated with questions that were scored as a 2. He made such changes to a total of 147 registered rep response forms, doctoring 547 questions in all, Finra said.
"In order to avoid and without performing any requisite follow-up generated from scores of 2 for audits that Storms conducted, he altered the ... data after exporting it for numerous branches," the complaint said.