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When Respondent’s office manager advised him of the discrepancy, Respondent

did not withdraw the false Memphis airline and hotel receipts, but rather he withdrew the

$38.01 expense for the drinks at the Atlanta hotel. (Tr. pp. 107, 139). Respondent’s

office manager retrieved the $38.01 expense receipt and reported the discrepancy to the

home office, which then conducted an audit of Respondent’s expenses. (Tr. pp. 109, 112;

JX-4, p. 4).

Effective September 16, 2006, Penn Mutual terminated Respondent for

improperly submitting expenses for a business trip that did not occur. (Tr. p. 35; JX-3, p.

3). HTK terminated Respondent’s registrations on October 13, 2006.2 (JX-1, p. 5).

Respondent admitted that he knowingly created and submitted false receipts for

the Memphis airfare and hotel. (Tr. pp. 161-162). But Respondent stated that he actually

conducted work from the Atlanta hotel and that he had previously incurred legitimate

business expenses that had not been reimbursed, so the reimbursement for the hotel and

the airfare constituted a “wash.” (Tr. p. 186).

In July 2006, Respondent was not having financial difficulties and did not need

the money. (Tr. pp. 109, 187). Respondent stated that his intent in submitting the false

receipts and the false expense report was to show that he had traveled that month because

Penn Mutual monitored his travel through his expense reports. (Tr. pp. 177, 179).

Respondent testified that he was under pressure to complete recruiting trips because of

the significant drop in his production. (Tr. pp. 102-103,156, 179).

2 Respondent remains subject to FINRA jurisdiction for purposes of this proceeding, pursuant to Article V, Section 4 of the FINRA By-Laws, because (1) the Complaint was filed within two years after his registrations through HTK were terminated, and (2) the Complaint charges him with misconduct while he was registered.

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