A former employee at ETrade has been permanently banned from the industry after he refused to cooperate with a Finra investigation related to his allegedly having transferred funds from a client account without authorization.
The case involves Matthew J. Chimento, who started as a general securities representative in 2018. According to his BrokerCheck profile, Chimento began in the industry on March 1, 2018 with ETrade, the self-directed investing arm of Morgan Stanley.
As detailed in his letter of acceptance, waiver and consent dated March 9, Chimento resigned from the firm on November 20, 2023, amid an internal review around a suspicious transaction.
According to the document, the firm was investigating Chimento for allegedly “transferr[ing] funds out of a client’s account into an account for [his] benefit without client authorization.”
The document is silent on the amount of money that was purportedly transferred, when the alleged unauthorized transaction occurred, or the details of the client in question.
Following Chimento's voluntary resignation, Morgan Stanley filed a Form U5 with Finra on December 11 detailing the circumstances around his departure.
On February 8, Finra contacted Chimento to ask for information and documents in relation to his alleged unethical and financially harmful conduct.
That request was met with a response on February 21 via an email from a legal representative. According to Finra, his counsel said Chimento acknowledged Finra’s request, but “will not produce the information or documents requested.”
That refusal violated Finra Rule 8210, which in part says Finra may compel a “person associated with a member, or any other person subject to FINRA’s jurisdiction to provide information orally, in writing, or electronically . . . with respect to any matter involved in the investigation, complaint, examination, or proceeding.” Another section under the rule draws an even harder line: “[n]o member or person shall fail to provide information . . . pursuant to this Rule.”
Finra says Chimento also breached Rule 2010, which holds associated persons should “observe high standards of commercial honor and just and equitable principles of trade” in conducting their business.
As a consequence of these violations, the self-regulatory agency barred Chimento from any association with member firms. Finra placed Chimento under statutory disqualification, preventing him from engaging in any capacity with Finra member firms, including clerical roles.
Siddharth Jawahar was sentenced 11 years in prison and $31M in restitution for running Swiftarc Capital fraud scheme
Wall Street banks expand wealth services as ultra-high-net-worth client demands extend further above and beyond investment management.
The acquisition of $2 billion Gilbert & Cook extends a buying spree for the ultra-high-net-worth firm that has already touched six states this year.
After years of encouraging sacrifice and delayed gratification, advisors have to do the next emotional lift: helping clients let go of a potentially harmful scarcity mindset.
A new JPMorganChase Institute report reveals how deeply stock market wealth now drives everyday American spending, especially for retirees.
Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains
Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income
