According to FINRA, Jong Ik Lee was fined $5,000 and suspended for nine months after improperly using his member firm's funds by receiving reimbursements totaling $1,878.32 for meal and transportation expenses that he mischaracterized as business expenses.
Lee requested and received reimbursements for expenses that were actually personal and did not comply with the firm's travel and business expense policy. He used project codes he knew he was not entitled to use—either because they had expired or because they were from projects on which he was not assigned. More seriously, Lee altered receipts to make the expenses appear eligible for reimbursement. He changed details on car service receipts including the time of the ride, pick-up location, drop-off location, and map route, then submitted these falsified receipts to the firm for reimbursement.
While the dollar amount involved—$1,878.32—is relatively small, the conduct raises serious integrity concerns. Altering documents to obtain money under false pretenses demonstrates dishonesty that is incompatible with the trust required in the securities industry. The fact that Lee took deliberate steps to falsify multiple receipts shows this was not an inadvertent mistake but a pattern of intentional deception.
To Lee's credit, after the misconduct was discovered, he voluntarily repaid the firm for the improperly obtained reimbursements. This restitution was considered in determining the sanctions, which while including a substantial nine-month suspension, did not result in a permanent bar from the industry.
FINRA's Rules of Conduct require high standards of commercial honor and just and equitable principles of trade. Misusing firm funds and falsifying documents to obtain reimbursements violates these fundamental principles. Firms must be able to trust that their representatives are honest in all business dealings, including something as routine as expense reporting.
For investors, this case illustrates that FINRA examines the integrity of registered persons across all aspects of their conduct, not just direct interactions with customers. Someone willing to falsify documents to obtain small reimbursements demonstrates a lack of integrity that could manifest in more serious ways affecting investors. The nine-month suspension reflects the seriousness of document falsification while recognizing Lee's voluntary restitution. However, investors should be aware that any history of dishonesty, even in internal firm matters, is a red flag that the individual may not be trustworthy with investor assets.
