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Conversion is the wrongful exercise of dominion over the personal property of

another.3 Respondent argued that because Penn Mutual had prepaid the funds to him, he

properly exercised dominion and control over the funds and could not be found to have

converted them. Respondent also argued that the reimbursement he received was not a

conversion, but a “wash” when balanced against other expenses that he had legitimately

incurred but for which he had not previously sought reimbursement. Finally, Respondent

argued that his intent in submitting the false receipts was to deceive Penn Mutual

regarding his travel, not to obtain funds.

The Hearing Panel finds that although Respondent’s name was on the bank

account, the funds belonged to Penn Mutual. Respondent received the funds as an

employee of Penn Mutual, and was only authorized to spend the funds for legitimate

business purposes, as approved by Penn Mutual after submitting accurate documentation.

Respondent admitted that he created and submitted false documentation to obtain

reimbursement for expenses that he had not incurred. By so doing, Respondent intended

to, and did obtain funds from Penn Mutual to which he was not entitled, and thereby

converted those funds.

The Hearing Panel also rejects Respondent’s argument that the money he received

amounted to a “wash.” If Respondent had other legitimate expenses, he was required to

seek reimbursement with appropriate documentation; he is not entitled to a “credit” for

expenses that he incurred but did not submit, and which were not verified and approved

3 Dep’t of Enforcement v. Paratore, No. 2005002570601, 2008 FINRA Discip. LEXIS 1, *10 (NAC Mar. 7, 2008); see also FINRA Sanction Guidelines, p. 38, n.2 (2007), available at http://www.finra.org/web/groups/enforcement/documents/enforcement/p011038.pdf (Conversion is “an intentional and unauthorized taking of and/or exercise of ownership over property by one who neither owns the property nor is entitled to possess it.”).


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