Ex-broker: I forced out Finra director

Finra last week said that its Southern regional director, Mitchell C. Atkins, had resigned to pursue other interests, but a self-proclaimed whistle-blower is taking credit for his departure.

Former broker David Evansen last month wrote to Richard G. Ketchum, Finra’s chief executive, and Susan Axelrod, executive vice president of regulatory operations, claiming that in 1993, Mr. Atkins, now 42, was indicted in Louisiana on a criminal charge. The charge alleged that he used money raised in bingo games for non-charitable purposes, which is against state law.

Along with the letter, Mr. Evansen, of New Lisbon, Wis., provided legal documents he had uncovered.

His motivation for sending the missive? Mr. Evansen claims that Mr. Atkins was engaged in a “spurious enforcement action” against him.

Mr. Evansen believes that his letter led to Mr. Atkins’ resignation, although he has no proof. “There may be a lot of extenuating circumstances behind [Mr. Atkins’ resignation], but yes, I think it’s because of my letter,” he said in an interview.

FELONY AND MISDEMEANOR

The documents he sent to the Financial Industry Regulatory Authority Inc. show that Mr. Atkins was indicted on a felony and misdemeanor charge in March 1993. The felony charge was dismissed in late 1993 when Mr. Atkins pleaded guilty to the misdemeanor charge.

He was sentenced in early 1994 to conditional probation, 100 hours of community service, a $500 charitable contribution and a $500 fine.

The misdemeanor charge against him was set aside and the court record supposedly expunged in March 1994 after Mr. Atkins had complied with the terms of his sentence.

This information comes from handwritten docket entries and other court records from the 19th Judicial District Criminal Court in Baton Rouge, La. Mr. Atkins’ name was not completely redacted from the documents.

Via e-mail, Finra spokeswoman Nancy Condon wrote that Mr. Atkins resigned to pursue other interests.

“People resign and leave organizations all the time,” she wrote, declining to comment further.

Several sources said Mr. Atkins is expected to leave at the end of the month.

A call to Finra’s Boca Raton, Fla., office in an attempt to speak with Mr. Atkins was referred to Ms. Condon.

The Boca Raton office covers the state of Florida, and as regional director, Mr. Atkins has additional responsibility for offices in Atlanta, Dallas and New Orleans.

Mr. Evansen’s letter has been passed around from broker to broker and to others in the industry over the past several weeks, giving rise to speculation that it triggered Mr. Atkins’ departure.

“The timing [of Mr. Atkins’ resignation] is interesting, at a minimum,” coming just weeks after the letter was sent, said Alan Wolper, a partner at Ulmer & Berne LLP and a former director of Finra’s Atlanta office.

Having a top enforcer who had been subject to a criminal charge would be a problem for Finra, observers said.

“There’s no way a [broker-dealer] firm could have hired Mitch [20 years ago],” said Joel Blumenschein, president of Freedom Investors Corp.

“If we had [hired him], God knows, we would’ve gotten whacked for not doing our due diligence,” said Mr. Blumenschein, who resigned from the Finra board a year ago after settling a failure-to-supervise case with the regulator.

Ms. Condon would not comment on whether Finra knew about Mr. Atkins’ criminal charge before Finra received Mr. Evansen’s letter.

AN UP-AND-COMER

Mr. Atkins joined Finra’s New Orleans office in 1993 before the court records of his case were expunged.

He was seen as an up-and-comer within Finra, where he had enjoyed a series of promotions. Mr. Atkins was named the first director for the Boca Raton office, Finra’s first Florida office, when it opened in 2005.

“He was told to go clean up South Florida [and] the “maggot mile’ in Boca [Raton]” where a lot of bucket shops operated, Mr. Wolper said.

Known as a tough enforcer, Mr. Atkins has ruffled feathers among many smaller firms in his district.

For his part, Mr. Evansen worked at several firms that had run-ins with Finra, including Newbridge Securities Corp. and Jesup & Lamont Securities Corp.

He says he clashed with Finra examiners in Florida when he worked at Newbridge from 2003 to 2009.

And Mr. Evansen claims that a whistle-blower action he filed with the Securities and Exchange Commission relating to Penson Worldwide Inc., the former clearing firm that ran into trouble with bad collateral, caused further ill will by embarrassing Finra officials. Ms. Condon had no comment on those charges.

A Finra hearing panel last August barred him from the industry for failing to answer questions about several customer complaints he received at Newbridge. Mr. Evansen, who is appealing the bar, said he had not been properly notified of the inquiry and responded to Finra’s questions in 2011.

He has seven customer disputes on his record, including four settlements worth a total of $462,500 with Newbridge customers, according to Finra’s BrokerCheck system.

Mr. Evansen said the firm settled over the sale of private placements with which he was not involved, and that he did not contribute to the settlements.

He left the industry in July 2010 and now works as a logistics consultant.

Related Topics: Financial Industry Regulatory Authority