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 The Financial Industry Regulatory Authority (FINRA), Wall Street’s
industry-funded watchdog, last week barred John Anthony Waszolek
from the securities industry for his 2009 attempt to become the
beneficiary in a client's will. The widow, who died in 2010 at age
83, had struggled with dementia and blindness.
Waszolek, who could not be reached for comment, joins roughly six
other brokers whom FINRA disciplined in unrelated cases during the
past year for naming themselves as beneficiaries, trustees or
executors of clients' estates. Major brokerage firms typically
prohibit the practice, which could lead to conflicts of interest in
investment decisions or exploitation.
Waszolek, who agreed to be barred from the business in a civil
settlement with FINRA on July 13, neither admitted nor denied the
regulator’s allegations. His son, Eric Waszolek, still works at
Raymond James and is not accused of any wrongdoing.
John Waszolek joined a Scottsdale office of Raymond James Financial
Inc in 2012, saying in an interview at the time that he left Morgan
Stanley because "I wanted to find a smaller, more nimble,
client-friendly company," according to FINRA.
Waszolek, in fact, gave very personal attention to clients – but not
always for the friendliest of reasons, FINRA said in the settlement.
Waszolek had paid little attention to the elderly client's account
until she developed dementia and became "frail, withdrawn, and
isolated," FINRA said in the settlement.
Waszolek, who was at UBS at the time, began taking the client to
doctor appointments and visiting with her and care providers at an
assisted living residence, FINRA said.
UBS declined to comment about the case.
The broker was present when a doctor diagnosed the client with
Alzheimer's. While tracking her medical care, Waszolek began to
intervene in her financial affairs, according to the FINRA
settlement.
Waszolek gained power of attorney, despite a neuropsychologist's
conclusion that the client "had no recollection of recently having
drafted very specific plans to alter her estate plan." Waszolek then
managed a trust that his client had established for charity
donations, according to FINRA.
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He used his power of attorney and control of the trust to have
himself named beneficiary of the account, valued at $1.8 million,
according to the settlement. The broker concealed the arrangement
from his employer at the time, UBS, and then from Morgan Stanley,
where he brought the account in 2009.
Morgan Stanley terminated him in 2011 for concerns about a client's
bequest to him, according to Waszolek's publicly available
professional disclosure report. Morgan Stanley declined comment on
Friday, other than to say that he no longer worked at the firm.
A Raymond James spokesman, in a statement to Reuters on Friday, said
FINRA's complaint made it apparent that Waszolek did not give
"accurate and complete information" about his termination from
Morgan Stanley.
While securities regulators point to beneficiary changes as signs of
possible senior abuse, the changes often go unnoticed until after
the victim dies, lawyers and regulators have said.
(Reporting by Richard Satran; Editing by Suzanne Barlyn and Nick
Zieminski)
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