According to FINRA, Peter James Fetherston is facing charges that he converted and misused customer funds totaling $89,000.

The complaint alleges that Fetherston induced two customers, a married couple, to write him three checks totaling $89,000 by falsely representing that they owed him commissions and that he would use a portion of the funds to purchase additional investments in their account at his member firm. In reality, the customers did not owe Fetherston any commissions, and he never invested any of the funds on their behalf. Instead, Fetherston allegedly deposited the checks into his personal bank account and spent the funds on personal expenses, including paying off significant debt.

The complaint also alleges that Fetherston provided false or misleading information, documents, and testimony to FINRA during its investigation. In response to FINRA's request for information about his receipt and use of the $89,000, Fetherston allegedly falsely stated that the customers gave him the funds to help him pay his medical bills and expenses. He then allegedly provided FINRA with a handwritten note, purportedly drafted and signed by the customers, stating they gave him the three checks to help pay his medical expenses and associated costs.

However, the customers neither wrote nor signed any such note and did not give Fetherston any funds for medical expenses. During on-the-record testimony, Fetherston allegedly falsely testified that the customers gave him the money for medical expenses and that the customers wrote and signed the handwritten note.

Additionally, the complaint alleges that Fetherston failed to respond completely to FINRA's written requests for information. While he provided a partial response, it was incomplete because he failed to identify the medical expenses he supposedly paid with the money obtained from the customers.

These allegations, if proven, describe serious fraud involving conversion of customer funds, fabrication of documents, and false testimony. This represents a complete breakdown of the trust relationship between a financial professional and clients. The allegations suggest a deliberate scheme to defraud customers and then cover up the fraud by lying to regulators and fabricating evidence.

It is important to note that these are allegations in a complaint, and findings have not yet been made. Fetherston has the right to defend against these charges, and the complaint does not represent a decision as to the allegations. For investors, however, the allegations serve as a reminder to be cautious about writing checks payable to financial professionals personally rather than to the firm or investment custodian.