Initiated By
FINRA
Allegations
Tranchina was named a respondent in a FINRA complaint alleging that, after being fired by his former member firm and being instructed not to return to the office, he broke into his locked office and stole client-related files belonging to the firm and its affiliated insurance company. The complaint alleges that the files that Tranchina stole related to firm clients and prospective clients, and that he had no authorization or right to take them. Tranchina accessed this information, which included firm customer names, addresses, telephone numbers, and email addresses, in an effort to take these customers with him to a new firm. The complaint also alleges that Tranchina willfully failed to amend his Form U4 to disclose that he was criminally charged with theft by unlawful taking due to his breaking-and-entering and theft of firm files.
Resolution
Pending Appeal
Bar
Bar (Permanent)
Registration Capacities Affected
All Capacities
Duration
Indefinite
Start Date
3/23/2023
Sanctions
The decision includes a finding that Tranchina willfully failed to disclose a material fact on a Form U4, and that under Section 3(a)(39)(F) of the Securities Exchange Act of 1934 and Article III, Section 4 of the FINRA By-Laws, this omission makes him subject to a statutory disqualification with respect to association with a member.
Regulator Statement
Hearing Panel decision rendered May 18, 2021 wherein Tranchina is barred from association with any FINRA member in all capacities and ordered to pay costs in the amount of $4,977.43. The sanctions were based on the findings that Tranchina engaged in conversion and gained unauthorized access to member firm information by breaking into his former firm's offices and taking customer files. The findings stated that a managing partner at the firm and its parent company told Tranchina that his agent contracts with the firm and its parent company were terminated. Tranchina was also told not to return to the office, that any customer files that he shared with a certain adviser would remain with that adviser at the firm, and that the firm would give him client files, minus any firm or parent company content, that the adviser was not part of. Tranchina then drove to the firm after business hours and used a broom to knock out ceiling tiles and opened his locked office door from the inside. Once inside the office, Tranchina grabbed as many files as he could carry off his desk and did not attempt to separate his personal files from the files he grabbed, nor did he take any of his personal effects. When confronted by a cleaning crew supervisor, Tranchina gave a false name. The following week, the managing partner made a report with the police on behalf of the firm that Tranchina had engaged in a burglary. About a week later, Tranchina returned a box of materials to the firm in response to demands from the parent company and two calls from the police, but the firm and the parent company did not agree that Tranchina had returned all the materials he had taken after his termination. Tranchina's lawyer then mailed to the parent company's lawyers a second set of documents that included confidential information about firm and parent company customers, describing them as being the remaining firm and parent company files in Tranchina's possession. Unconvinced that Tranchina returned all the files he had taken, the firm began a criminal proceeding against him through a sworn complaint in New Jersey municipal court. Tranchina ultimately obtained a conditional dismissal of the proceedings. The findings also stated that Tranchina willfully failed to timely amend his Uniform Application for Securities Industry Registration or Transfer (Form U4) to disclose the criminal proceeding that resulted from his misconduct. Tranchina received a complaint-summons from the municipal court accusing him of theft by unlawfully taking or exercising control of certain movable property, and criminal mischief by recklessly or negligently damaging property belonging to the firm. Tranchina did not tell his new firm about the complaint-summons, his court appearances, or the conditional dismissal when they occurred. Although Tranchina amended his Form U4 three times since joining the new firm, each time he answered no to the question that asks if he has ever been charged with a misdemeanor involving the wrongful taking of property. On June 4, 2021, Tranchina appealed the decision to the NAC. NAC decision rendered March 23, 2023, wherein the findings made and the sanctions imposed by the Hearing Panel are modified. The NAC did not decide whether Tranchina engaged in conversion, and dismissed the allegation of violation. As such, the NAC modified the sanctions the Hearing Panel imposed. For gaining unauthorized access to the firm's information by breaking into the firm's office and removing customer files, Tranchina is barred from association with any FINRA member in all capacities. For willfully failing to disclose on his Form U4 that he had been charged with a misdemeanor involving wrongful taking of property, the NAC assessed, but did not impose, a six-month suspension in all capacities and a $10,000 fine. The NAC also imposed appeal costs of $1,504.66. On April 20, 2023, Tranchina appealed the decision to the SEC. The bar is in effect pending review.
