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Finra Sanctions Against Rep For Misappropriating Customer Information Upheld

Dante J. DiFrancesco, Exchange Act Rel. 66113, January 6, 2012

DiFrancesco was suspended for ten days and fined $10,000 by Finra. It found that he violated Finra's Rule 2110 ("high standards of commercial honor and just and equitable principles of trade"). 

DiFrancesco was planning to leave his firm and moving to another. He attempted to download data regarding his 200 personal clients. In fact, he downloaded and removed from the firm confidential personal information for 36,000 additional clients of his firm. He then provided that data file to his new firm. He did this after a manager at his firm told him to leave the firm immediately after blocking an email that contained the client list.

At the hearing DiFrancesco acknowledged his understanding that his firm considered all client information proprietary to the firm and that he intentionally violated firm policy.

The Commission upheld Finra's finding that DiFrancesco had violated Rule 2110. It noted that there is a duty to maintain the confidentiality of client information that "is grounded in fundamental fiduciary principles…." As to DiFrancesco's claim that he only intended to take information relating to his own clients, the Commission noted that intent is not required to establish a violation of Rule 2110.