NOTE: Stipulations of Fact and Consent to Penalty (SFC); Offers of Settlement (OS); and Letters of Acceptance Waiver, and Consent (AWC) are entered into by Respondents without admitting or denying the allegations, but consent is given to the described sanctions & to the entry of findings. Additionally, for AWCs, if FINRA has reason to believe a violation has occurred and the member or associated person does not dispute the violation, FINRA may prepare and request that the member or associated person execute a letter accepting a finding of violation, consenting to the imposition of sanctions, and agreeing to waive such member's or associated person's right to a hearing before a hearing panel, and any right of appeal to the National Adjudicatory Council, the SEC, and the courts, or to otherwise challenge the validity of the letter, if the letter is accepted. The letter shall describe the act or practice engaged in or omitted, the rule, regulation, or statutory provision violated, and the sanction or sanctions to be imposed.

Timothy John Imhof
AWC/2007010580902

Imhof accepted $3,000 in cash a coworker handed to him on an outside stock loan finder’s behalf, and failed to disclose his acceptance of this money to his supervisor or others at his member firm. In exchange for his receipt of the payment, Imhof provided the finder with favorable treatment by his firm that he otherwise would not have provided. Imhof gave the finder a “first look” at the firm’s securities inventory available for lending and the firm’s needs for securities to borrow; at times, Imhof entered into transactions favorable to the finder if the finder could match his competitors’ terms for specific securities lending transactions his firm executed. As consideration for the payment, Imhof occasionally offered the finder the opportunity to locate various securities that his firm wished to borrow or lend at particular rates before contacting competing finders to see if a better rate existed for his firm. Imhof arranged for his firm to pay finders in transactions for which he knew, or should have known, that the finders performed no services; the payments were unwarranted and improper. Imhof arranged for his firm to make payments to finders by noting on trade tickets and the firm’s lending transaction reporting system that certain entities acted as finders or were owed finder’s fees, causing his firm’s books and records to be in violation of NASD Rule 3110, Section 17(a) of the Securities Exchange Act of 1934, and Rules 17a-3 and 17a-4 thereunder because the recipients of the funds deemed to be finder’s fees did not provide any finder-related services.

Timothy John Imhof : Fined $10,000; Suspended 12 months

Tags: Finder Fees