A former Morgan Stanley Smith Barney registered representative has been barred by FINRA.
The Financial Industry Regulatory Authority (FINRA) has barred former Morgan Stanley Smith Barney registered representative John Batista Bocchino for concealing approximately $190 million in Venezuelan bond trades from the firm.
The bonds that Bocchino had concealed were restricted from trading due to the regulatory, anti-money laundering and reputational risks it posed, FINRA said in a recent statement.
Despite the restriction, he continued to trade in the Venezuelan bonds on behalf of his customers, but hid and carried out trades by using several nominee accounts in the names of well-known US financial institutions.
Unbeknownst to the financial institutions, Bocchino carried out 300 trades in the accounts. He created hundreds of firm documents that contained false information to conceal his customers’ trading.
FINRA found that least three were not customers of Morgan Stanley and were not approved to trade through the firm, and one had previously had its account frozen by the firm. It also found that Morgan Stanley were unable to carry out anti-money laundering checks because Bocchino concealed the trades from the financial services firm.
“Mr. Bocchino concealed his customers’ identities in order to engage in trading his firm prohibited,” said Susan Schroeder, acting head of enforcement at FINRA. “FINRA will always pursue misconduct such as Mr. Bocchino’s, who evaded the appropriate scrutiny of his firm’s AML and compliance departments by falsely creating the appearance of compliance.”
Also, FINRA stated that registered representative Rafael Barela Jacinto, Bocchino’s sales assistant at Morgan Stanley, was suspended for one year and fined $10,000 for creating firm documents that contained false information