Kimberly Springsteen-Abbott, a senior brokerage and private placement executive who was barred from the securities industry in 2015 by the Financial Industry Regulatory Authority Inc., displayed wide-ranging misconduct involving tens of thousands of dollars of expenses charged to private placement funds, and Finra's banning of her from the industry was in line with industry standards, according to a review of her case released last Friday by the Securities and Exchange Commission.
Finra also ordered Ms. Springsteen-Abbott to pay almost $209,000 in disgorgement and a fine of $100,000.
Brokers and executives can run afoul of securities industry rules if they abuse company expense policies.
Ms. Springsteen-Abbott is the CEO and chair of Commonwealth Capital Corp., according to the company website. She did not return a call for comment last Friday. Her attorney, Steven M. Felsenstein, declined to comment.
Commonwealth Capital packaged investments in equipment leases into 13 private placement funds that are sold through independent broker-dealers. In the past, Ms. Springsteen-Abbott was also the head of the related broker-dealer, Commonwealth Capital Securities Corp. That position is now held by her husband, Henry Abbott, according to the firm’s BrokerCheck profile.
In 2013, Finra charged Ms. Springsteen-Abbott with persistent misuse of investor money over a three-year period to pay for personal expenses including home remodeling, trips, meals and Christmas decorations.
She then reached a $1.5 million settlement with the SEC after the agency alleged that related private placement funds misled investors regarding compensation practices at the funds.
Ms. Springsteen-Abbott eventually appealed Finra’s decision to bar her from the brokerage industry to the SEC. While the SEC's decision upholds Finra’s barring of Ms. Springsteen-Abbott over misuse expense charges, the commission’s review found that Finra’s fine was excessive.
A Finra review panel had already reduced the original fine of $100,000 to $50,000.
The SEC finds “as Finra did, that a number of aggravating factors are present and render Springsteen-Abbott’s misconduct egregious,” the commission wrote in its decision. “Springsteen-Abbott engaged in a pattern and practice of misusing fund monies for over three years. She unjustifiably enriched herself by misallocating money from the funds, to the harm of investors.”
“Once Finra began investigating, Springsteen-Abbott continued to conceal her misconduct by providing false information, both orally and in writing, in an attempt to justify the expenses,” according to the SEC. “Springsteen-Abbott’s continued association with a Finra member firm would present a risk to the integrity of the markets and to investors.”
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