← Broker database 2023-12-04
Daniel Vatterott Suspended Six Months for Falsifying Trade Records
According to FINRA, Daniel Hernan Vatterott was fined $5,000 and suspended from association with any FINRA member in all capacities for six months for causing his member firm to maintain inaccurate books and records. Similar to the Parkhurst case, Vatterott had an agreement to share commissions with the estate of a former representative using a joint representative code, but he changed the codes on trades to a different representative code.
The firm's system correctly prepopulated trades with the joint representative code, but Vatterott manually changed them, resulting in him receiving a higher percentage of commissions than entitled under the joint production agreement. Vatterott mistakenly believed the agreement did not apply to new assets added to accounts and that he was authorized to use the other representative code.
What distinguishes this case is that Vatterott did not verify his understanding before changing the codes. He did not ask the estate whether he could change the representative codes or speak with his firm to verify whether the transactions were subject to the joint production agreement. This failure to confirm his assumptions before acting resulted in a longer six-month suspension compared to the one-month suspension in the similar Parkhurst case.
After the violation was discovered, Vatterott reimbursed the firm approximately $87,500—the additional commissions he received as a result of changing the codes. This case emphasizes that representatives have an obligation to verify their understanding of commission agreements before making changes that affect compensation. Taking action based on mistaken assumptions, without verification, will result in significant sanctions even if there was no intent to defraud.