James P. Pelletiere faces industry ban due to violations of FINRA Rules

Brief about James P. Pelletiere

In 1998, James P. Pelletiere registered as an investment company and variable contract products representative (IR) upon joining a third firm. Pelletiere continued his journey in the securities industry as an IR while hopping between two more firms from 2004 to 2019.

In 2019, Pelletiere joined Pruco Securities, LLC (Pruco), a FINRA member firm, as an IR. However, in October 2022, Pruco filed a Form U5, citing Pelletiere’s termination due to an expired leave of absence.

On December 16th, 2022, Pruco filed an amended Form U5, revealing a customer complaint against Pelletiere. He failed to disclose surrender fees associated with a life insurance policy purchase. An internal review was also underway, investigating Pelletiere’s handling of customer funds.

Later, on March 31st, 2023, Pruco filed another amended Form U5, confirming the findings of their internal review. It turns out that Pelletiere had taken cash from a customer and deposited it in his personal bank account. Even though Pelletiere is no longer associated with any FINRA member firm, he’s still under their watchful eye per Article V, Section 4 of the By-Laws.

Allegations

Pelletiere violated FINRA Rules 8210 and 2010 by failing to provide information and documents requested under Rule 8210 in connection with their investigation into whether Pelletiere had, among other things, misused customer funds.

This case originated from submissions made by Pruco, and it pertains to breaches of FINRA regulations. Violations of Rule 8210 occur when individuals affiliated with a member fail to furnish requested information, granting them the authority to seek such information.

In this case, as part of an inquiry into Pelletiere’s suspected mishandling of customer funds, FINRA sought information and documents from him. The request explicitly cautioned that non-compliance could result in penalties, potentially including expulsion from the securities industry. Despite the warning, Pelletiere failed to reply to the request, thereby breaching Rules 8210 and 2010.

As a consequence, Pelletiere agrees to penalties that include being prohibited from any association with a FINRA member in any capacity. This implies that he is not allowed to participate in any role, including clerical positions. The specific date when these sanctions take effect will be decided by FINRA. If he is barred, Pelletiere will face statutory disqualification.

Overview

On October 4, 2023, an AWC (Acceptance, Waiver, and Consent) was issued, prohibiting Pelletiere from affiliating with any FINRA member in any role. Pelletiere, without acknowledging or refuting the allegations, agreed to the penalty and the determination that he declined to furnish information and documents requested by FINRA during its inquiry into potential misconduct, including the possible misuse of customer funds and acceptance of cash payments from a client.

Key Points

• Termination and Customer Complaints: Pelletiere was terminated from Pruco Securities, LLC, in October 2022, with a disclosed customer complaint related to his failure to disclose surrender fees and potential misuse of customer funds.
• Internal Review and Misuse of Funds: An internal review by Pruco revealed Pelletiere’s failure to disclose surrender fees and the serious allegation of taking cash from a customer and depositing it into his personal bank account, raising concerns about fund misuse.
• Violation of FINRA Rules 8210 and 2010: Pelletiere faced allegations of violating the rules for failing to provide requested information in connection with their investigation into potential misconduct, including the mishandling of customer funds.
• Non-Compliance and Consequences: Despite explicit warnings, Pelletiere’s non-compliance with the information request resulted in a breach of the rules. Penalties include a prohibition on any association with a member, effective on a date determined by FINRA.
• Statutory Disqualification: If barred, Pelletiere will face statutory disqualification, severely limiting his participation in the securities industry due to the gravity of the alleged violations.

Conclusion

In summary, James P. Pelletiere‘s career in the securities industry took a troubling turn, leading to his termination from Pruco Securities, LLC, and regulatory actions. Allegations of failure to disclose fees and misusing customer funds prompted a FINRA investigation. Pelletiere’s non-compliance resulted in an Acceptance, Waiver, and Consent (AWC) prohibiting him from any association with a FINRA member. The severity of the violations raises the possibility of statutory disqualification, highlighting the importance of regulatory adherence in the financial industry. This case underscores FINRA’s commitment to market integrity and investor protection.