Florida Investment Advisor Fined, Suspended for Unauthorized Transactions
On February 21st, 2018, the Financial Industry Regulatory Authority (FINRA) announced sanctions against Heather Xanthe VanLandingham (CRD#: 5343446), a broker most recently located in Riverview, Florida. According to information provided by FINRA, Ms. VanLandingham was accused of conducting unauthorized transactions on a client’s account. The alleged misconduct in this case occurred in 2016, when this broker was employed at Morgan Stanley, and was working out of an office in Palm Harbor. Without admitting or denying any wrongdoing in this case, Ms. VanLandingham agreed to the following sanctions:
- A 20 day suspension from the securities industry; and
- A $5,000 civil fine.
All information contained within this post comes directly from FINRA’s record. If you are interested in viewing the complete details regarding this case, please refer to the official FINRA documents: NO. 20160489425-01.
Allegations Against Heather VanLandingham
A Customer’s Email Account Was Hacked
In January of 2016, a customer of Morgan Stanley had their email account hacked. While the hacker had access to the email account, messages were sent to broker Heather VanLandingham. Among other things, the hacker requested that Ms. VanLandingham complete two separate wire transfers from the customer’s brokerage account to an outside bank account. In total, these two wire transfers were worth $53,000. Unbeknownst to this broker, the email messages requesting the cash were coming from an imposter.
Insufficient Funds Were in the Account; Securities Were Sold
Notably, this customer’s account did not have $53,000 in cash at the time that the requests were made. In order to cover the transaction, Ms. VanLandingham had to sell off shares of four separate securities to cover the second wire transfer.
The Broker Made False Statements
According to FINRA, this broker made false statements and recorded false information in Morgan Stanley’s books. In firm records, she explicitly noted that she spoke to the customer on the phone to get authorization for the transactions. In reality, there were no phone conversations in relation to the securities trades or the wire transfer. The contact with this customer was done entirely through the compromised email account. Yet, due to the false statements, Morgan Stanley processed all transactions, sending $53,000 in cash to the outside bank account.
FINRA Rules Violation: Inaccurate Records
Under securities industry rules, brokers and brokerage firms have a legal obligation to keep accurate records. Most notably, under FINRA Rule 4511, investment advisors must record accurate information regarding all transactions that they participate in. This includes records of how communication occurred. By falsely attesting that there were verbal conversations, Ms. VanLandingham violated industry rules and put her customers’ assets at serious risk.
Were You a Victim of Unauthorized Trading?
We can help. At Carlson & Associates, P.A, our Florida investment fraud lawyers have considerable experience handling unauthorized trading claims. If you or a family member was the victim of unauthorized trading, please contact us today to arrange a confidential review of your case. With an office in Miami, our legal team is committed to protecting investors throughout Florida.