Emily S. Pao, a Stockbroker with HSBC Securities (USA), Inc., was permanently barred from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity after consenting to findings that Pao had refused to cooperate in an investigation into allegations of converting funds from a customer. Letter of Acceptance, Waiver, and Consent, No. 20150459320-01 (Oct. 7, 2015).

According to the AWC, FINRA had requested that Pao, pursuant to Rule 8210, make an appearance and provide testimony under oath in connection with FINRA’s investigation into allegations that Pao converted funds from a retail bank customer. The AWC stated that Pao acknowledged, via an e-mail to FINRA staff on August 14, 2015, that she received FINRA’s request but that she would not be cooperating with FINRA’s requests for testimony at any point. Consequently, FINRA found Pao to have violated Rules 8210 and 2010, leading to her permanent bar.

FINRA Stockbrokers like Pao who do not cooperate with FINRA’s investigations often face a permanent bar from practicing in the securities industry as such lack of cooperation violates FINRA’s Rule 8210 – requiring that no member or person shall fail to provide information or testimony or permit an inspection and copying of books, records, or accounts pursuant to the rule. FINRA typically accompanies a Rule 8210 violation with a Rule 2010 violation when individuals, according to FINRA, do not appear to observe high standards for commercial honor and just and equitable principles of trade.

Firms and individuals, not surprisingly, are prohibited from unauthorized use of customer funds, borrowing of a customer’s securities or funds, forgery, non-disclosures or misstatements of material facts, and various deceptions and manipulations. Such conduct can also be found to violate criminal and other civil laws, and be subject to sanction from the federal and state government bodies.

Public disclosure records reveal that HSBC Securities (USA) Inc. discharged Pao on June 9, 2015, alleging that an internal investigation was conducted after a bank customer raised questions regarding a business banking account. The firm indicated that an investigation revealed that the bank affiliate closed the account for inactivity and mailed the funds to the customer. Pao, according to the firm, noted that she had access to the customer’s mail, received the bank check, signed and deposited the check into her own account for purposes of providing those funds to the customer. The funds, according to the firm, were not returned to the client. The bank affiliate subsequently terminated Pao’s employment.

Guiliano Law Group

If you have been the victim of securities fraud and you have a complaint, you should consult with an attorney. The practice of Nicholas J. Guiliano, Esquire, and The Guiliano Law Group, P.C., is limited to the representation of investors in claims for fraud in connection with the sale of securities, the sale or recommendation of excessively risky or unsuitable securities, breach of fiduciary duty, and the failure to supervise. We accept representation on a contingent fee basis, meaning there is no cost unless we make a recovery for you, and there is never any charge for a consultation or an evaluation of your claim. For more information contact us at (877) SEC-ATTY.

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