I have been meaning to write something about this recent NAC decision for a while now, but I am still not really sure what to make of it. I suppose it stands for two propositions. First, there is almost nothing that a registered rep can do without FINRA sticking its nose in, regardless of whether it is securities related. Second, FINRA is willing to bring its hammer down – in the form of a permanent bar – simply for boorish behavior, something that is, sadly, hardly unusual in the broker-dealer world.
Ahmed Gadelkareem is a former registered rep. According to the decision, he worked for 19 firms over a 19-year period. For less than a year, he was registered with Blackbook Capital, LLC. Unfortunately, it appears that Ahmed didn’t necessarily work and play well with others, so Blackbook terminated him. His U-5 reads that he “was terminated for repeatedly engaging in unprofessional conduct in the workplace, including without limitation, threatening and abusive interaction with female employees.” But, that is not what got him into trouble with FINRA.
After he was let go, Ahmed “embarked on a campaign of abusive, harassing, and threatening communications directed to Blackbook employees,” including “numerous telephone calls, emails, and texts, many of which contained vulgar language and threats.” More specifically,
- Ahmed left a voicemail message “in which he made a number of vulgar remarks” about the recipient’s mother.
- He left three more voicemail messages for the same person mentioning the recipient’s mother in a suggestive manner and taunting him.
- He sent “numerous emails” to an owner of Blackbook, accusing the owner of “unauthorized trading, drug use, and fraternizing with a female employee.”
- He accused a Blackbook registered rep of “stealing” another registered representative’s paycheck.
- He sent a bogus letter from a fictitious FINRA examiner to Blackbook identifying supposed conduct issues.
- He filed police reports and a number of lawsuits against Blackbook, and a bar complaint against Blackbook’s lawyer.
So, FINRA brought an Enforcement case against Ahmed “for sending multiple abusive, harassing, and threatening communications to persons associated with his former member firm, . . . in retaliation for his termination by Blackbook and to force Blackbook to settle his claims with respect to commissions the firm withheld.”
Ahmed lost. It seems that he did nothing to help himself at the hearing, as the decision recites that his “harassing conduct continued during the proceedings below,” including making “a throat cutting motion” to one witness as he sat down to testify at the hearing, filing “numerous unfounded complaints against Enforcement” and serving “fabricated subpoenas on witnesses after being instructed repeatedly by Enforcement and the Hearing Officer that such subpoenas were not permitted in FINRA proceedings.”
I am hardly condoning Ahmed’s behavior. He was rude to people, especially women, and there is no room for that in the workplace, or any place, for that matter. He was mean; he threatened people and tried to intimidate them. He was deceptive, and lied repeatedly. But…it just seems odd that FINRA decided to bring an Enforcement case against Ahmed for being, essentially, a douchebag. The securities industry is full of them. (So is the legal industry.) I can’t figure out what this case has to do with “investor protection, market integrity,” FINRA’s corporate tagline and its supposed principal motivators.
What is also noteworthy is that FINRA only cared because Ahmed’s terrible behavior was directed at his former BD. If he had done the same things to, say, his landlord, or the cable company, or his next door neighbor, FINRA wouldn’t have bothered to do anything. The decision includes this display of logic: “FINRA Rule 2010 encompasses all unethical, business-related conduct, even if that conduct is not in connection with a securities transaction. . . . Misconduct in connection with an associated person’s relationship with his employer constitutes business-related conduct to which the rule applies.” You can see the issue, one I have written about before: if you elect to work in this regulated industry, you must do so with the keen awareness that Big Brother, in the form of FINRA, is watching everything you do and say, as long as it is even only arguably job related. Even after you’re fired, apparently.
This sort of arrangement exists nowhere else, except, perhaps, the military. Teachers who bad-mouth the principal don’t get permanently barred. Ballplayers who talk back to the coach can still find work on other teams. Temperamental actors who abuse their directors continue to command enormous paychecks. But, registered reps who act badly – even absent any demonstration of customer harm – can find themselves not only out of a job, but out of the industry. The lesson this case provides is clear: As a registered rep, treat your co-workers and your boss with respect, even after you are fired. If you don’t, you run the risk that the price you pay will be more than acquiring a reputation for being “that guy” at the office who everyone hates; indeed, you run the risk that every crappy and petty thing you ever said will come back to haunt you. Crime may sometimes pay, but being douchy does not.