Just when you thought you had heard it all about the crazy misconduct of departing employees, a new story appeared in Advisor Hub (“Fired Merrill Broker Absconded with Client Info in a Duffel Bag: Finra,” August 4, 2021, by Jake Martin). The conduct involved a financial advisor who departed Merrill Lynch, but before he did, he is claimed to have “filled a duffel bag with client information” to accompany him to his new job.
Apparently, the financial advisor walked out with customer data, account forms, and statements, among other things, including social security numbers, account numbers, and balances. Even if he was moving to a “Protocol firm” from Merrill Lynch (a current remaining member of the Protocol for Broker Recruiting, which provides a menu and procedure regarding the information a departing broker can take to the new firm and what must be left with the firm from which he/she is leaving), he not only breached the Protocol and confidentiality restrictions in his employment agreements but also imposed a violation of SEC regulations on Merrill.
The Advisor Hub article points out that this financial advisor previously sent confidential and proprietary information to his personal email address, and committed other acts that were violative of regulation and internal Merrill rules. The lesson here is that confidentiality obligations, as well as industry rules and regulations (regardless of the industry), are real and will be enforced by employers as well as regulators. While this example of misconduct may be a bit extreme, it illustrates that such actions will be discovered, and there will be penalties up to and including loss of employment, regulatory and criminal prosecution, and ultimately, the end of a career.