← Broker database 2023-03-21
Jeffrey Lance Prince Suspended for Falsifying Representative Codes
According to FINRA, Jeffrey Lance Prince was fined $5,000 and suspended from association with any FINRA member in all capacities for three months for causing his member firm to maintain inaccurate books and records by falsifying representative codes for trades.
Prince entered into an agreement to service certain customer accounts, including executing trades, under a joint representative code he shared with a retired representative. The agreement specified what percentages of commissions Prince and the retired representative earned on trades placed using the joint representative code. Although the firm's system correctly prepopulated trades with the joint representative code pursuant to the agreement, Prince changed the representative code to a different code he shared with the retired representative.
As a result, the firm's trade confirmations reflected an inaccurate representative code, and Prince received a higher percentage of commissions than what he was entitled to receive under the joint production agreement. Prince mistakenly believed that the retired representative had previously agreed that he could change the representative codes to receive higher commission percentages. However, Prince did not confirm this understanding by asking the retired representative whether he could change codes or speaking with the firm.
The firm has since paid restitution of approximately $17,000 to the retired representative, which is the approximate amount of additional commissions that should have been credited to the retired representative if Prince had not changed the representative code on trades. Investors should understand that accurate books and records, including correct representative codes on trades, are essential for proper supervision, commission tracking, and regulatory oversight. Altering these codes, even based on a mistaken belief, constitutes a serious violation.