According to FINRA, Jimmy J. Galindo (CRD #2922619), based in Hollister, California, was fined $5,000 and suspended from association with any FINRA member firm in all capacities for one month, effective February 5, 2024, through March 4, 2024. The sanctions were imposed through a Letter of Acceptance, Waiver and Consent (AWC), in which Galindo, without admitting or denying the findings, consented to the sanctions and the entry of findings against him.
FINRA found that Galindo caused his member firm to maintain inaccurate books and records by changing the representative code on trades, which made trade confirmations display an incorrect representative code. The findings revealed that Galindo had entered into an agreement with another representative and a retired representative at the same branch office to service certain customer accounts under a joint representative code. The agreement specified the commission percentages that each individual would earn on trades placed using that joint code.
Although the firm's system correctly prepopulated trades with the applicable joint representative code, Galindo changed the code to a different one that he shared only with the other active representative. Galindo stated he mistakenly believed that his agreement with the retired representative did not apply to new assets added to the accounts covered by the arrangement. As a result of this change, Galindo received higher commissions than he was entitled to under the agreement. The firm later paid restitution to the retired representative, and Galindo reimbursed the firm approximately $38,216, representing the additional commissions he had improperly received.
Maintaining accurate books and records is a foundational requirement under securities regulations. When representative codes are altered on trade confirmations, it distorts the firm's records and can affect how commissions are allocated. Even when done under a mistaken belief, such actions can undermine the integrity of a firm's record-keeping systems and raise concerns about transparency.
Investors should understand that brokerage firms are required to maintain accurate records of all transactions, including which representatives are responsible for specific trades. If discrepancies arise in account records, they can sometimes signal deeper issues. Reviewing trade confirmations and account statements regularly helps investors stay informed about the activity in their accounts and identify potential problems early.
