According to FINRA, Richard Matthew Brendza was fined $5,000 and suspended for six months for causing his member firm's trade confirmations to show inaccurate representative codes by falsifying codes in the firm's order entry system.

Brendza entered into a commission-sharing agreement with a retiring representative and an active representative who was Brendza's immediate family member. The agreement specified what percentage of commissions each representative would earn on trades placed using a joint representative code. The parties later amended the agreement in writing to give Brendza and his family member higher commission percentages than in the original agreement.

However, Brendza placed trades in accounts covered by the amended agreement using a different representative code than required by that agreement. Although the firm's system correctly prepopulated trades with the applicable joint representative code, Brendza manually changed the code to a different joint representative code. The representative on Brendza's team also separately placed trades using an incorrect code.

These actions resulted in Brendza and his team member receiving higher commissions than they were entitled to receive under their agreement, effectively taking money from the retiring representative. Brendza did not ask the retiring representative whether he could change the code and did not indicate he was doing so. Brendza mistakenly believed the retiring representative had agreed to the changes, but in fact, no such agreement existed.

As a result of this conduct, Brendza's firm paid restitution to the retiring representative. Brendza and his team member reimbursed the firm approximately $275,000, representing the additional commissions they improperly received. By falsifying representative codes, Brendza also caused his firm to maintain inaccurate books and records, which is a separate violation.

While Brendza's conduct involved taking commissions from a colleague rather than directly from customers, it demonstrates dishonesty that could extend to customer dealings. The falsification of records and taking of money not rightfully his reflects poorly on his character and judgment.

For investors, this case illustrates that financial professionals' conduct toward their firms and colleagues can indicate their integrity in customer dealings. Commission theft or manipulation reflects dishonest character. The suspension is in effect from June 6, 2022, through December 5, 2022.