Erez Law is investigating claims regarding Susan Lynne Ellerbrook (CRD #2601238, Greenwood, IN). Ellerbrook recently submitted an AWC in which she was assessed a deferred fine of $10,000 and suspended from association with any FINRA member in any capacity for two months See FINRA Case #2013039612601. Ellerbrook was associated with City Securities Corp. (Indianapolis, IN) from July 2002 until her termination in January 2014. The Form U-5 filed by City Securities to terminate Ellerbrook’s registration states that she was “permitted to resign” because she “failed to comply with company policy with respect to a third party distribution from a client’s account and executed a transaction in such client’s account without the client’s verbal authorization.”
FINRA found that Ellerbrook falsely represented on an internal electronic request form that she had verbally “verified requestor’s identity and confirmed instructions” prior to initiating a $22,000 wire transfer from a customer’s account to a third party. Ellerbrook, after receiving an email purportedly from the customer directing her to wire the funds to the third party, attempted to reach the customer by phone, to verbally confirm the instructions, as required by her firm’s policies, but was unable to speak to the customer direction, according to FINRA. Ellerbrook’s firm learned that the customer’s email account had been hacked, and that the emails sent to Ellerbrook upon which she had acted were fraudulent, according to FINRA. The firm subsequently credited the customer’s account for the full amount of the withdrawal.
FINRA also found at the time Ellerbrook received the fraudulent wire transfer request, there had been a standing order to distribute $7,000 from the account to the customer, on a monthly basis. After complying with the fraudulent wire transfer request, however, almost the entire cash balance in the customer’s account had been wired to the third party, according to FINRA. FINRA found that Ellerbrook attempted to contact the customer by telephone to obtain authority to sell 1,000 shares of a preferred stock, and upon receiving no response after a few hours, Ellerbrook liquidated 1,000 shares of preferred stock from the customer’s account in order to fund the standing monthly distribution without the customer’s knowledge or consent. In entering into the AWC, Ellerbrook neither admitted nor denied FINRA’s findings.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, City Securities may be liable for investment or other losses suffered by Ellerbrook’s customers.
If you were a client of City Securities or Ellerbrook, and have suffered investment losses, financial irregularities or unauthorized transactions in your account, please contact Erez Law to explore your legal options. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies. To learn more, please call us at 888-840-1571 or complete our “contact form.”
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