State prosecutors plan to announce the arrests of about 50 stockbrokers suspected of paying impostors to take their broker-licensing tests, The Wall Street Journal reported Wednesday.
Prosecutors with the district attorney's office in Manhattan have alleged widespread criminal fraud in brokerage examination-taking after a 21/2-year investigation. They were scheduled to announce the arrests Wednesday."From an investor and regulatory standpoint, these are people who are supposed to be licensed to handle other people's money," said Ira Lee Sorkin, a former senior official with the Securities and Exchange Commission and Manhattan U.S. attorney's office. "They have a duty to act in the best interests of clients in an industry where they need specific training and expertise."
The brokers, all of whom work at small securities firms, will face felony charges of forgery and falsifying business records, the paper said. They could face up to 11 years in prison.
Since August, the National Association of Securities Dealers has censured 21 brokers - banning them from the business - for paying stand-ins to take their tests.
The investigations stemmed from an anonymous tip provided to the NASD. The case was then built up through handwriting samples.
Every broker must pass a NASD licensing test before selling securities to investors. The NASD now requires fingerprinting to take the tests.