This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2002).







Kurt T. Swartz,





Securian Financial Group, Inc.,



Commissioner of Economic Security,



Filed March 18, 2003


Lansing, Judge


Department of Economic Security

File No. 505902



Mark A. Greenman, Ruth Y. Ostrom, Greenman & Ostrom, Suite 270, 301 Fourth Avenue South, Minneapolis, MN  55415 (for relator)


Securian Financial Group, Inc., Susan Conley/Human Resources, 400 North Robert Street, St. Paul, MN  55101 (respondent)


Lee B. Nelson, M. Kate Chaffee, Minnesota Department of Economic Security, 390 North Robert Street, St. Paul, MN  55101 (for respondent Commissioner of Economic Security)


            Considered and decided by Klaphake, Presiding Judge, Lansing, Judge, and Stoneburner, Judge.


U N P U B L I S H E D   O P I N I O N




            A discharged senior investment accountant appeals the determination of a commissioner’s representative that his actions constituted misconduct that disqualified him from receiving unemployment benefits.  Because the record supports the findings that establish employment misconduct within the meaning of Minn. Stat. § 268.095, subd. 6(a)(2) (2002), we affirm.



            Kurt Swartz worked as a senior investment accountant with Securian Financial Group from March 2000 until March 2002.  Securian discharged Swartz for a course of conduct that involved repeated violations of Securian’s code of ethics.

            Securian is a financial planning and investment business regulated by the Securities and Exchange Commission (SEC).  To ensure compliance with insider-trading regulations, Securian created a code of ethics for employees with access to information on portfolio purchases.  The code of ethics, which was admitted into evidence, states that employees must receive approval from Securian before executing personal securities transactions, that no employee may sell stock for a profit “within sixty calendar days” of purchasing the stock, and that employees who violate a code provision may be permanently dismissed from employment.  Swartz’s signed statement acknowledging that he received a copy of the code of ethics on March 31, 2000, was admitted into evidence.

            In the first quarter of 2001, Swartz sold stock at a profit before the sixty-day period had expired, and he received a written warning for violating the code of ethics.  In the second quarter of 2001, Swartz again violated the sixty-day rule and received another written warning.  In the third quarter of 2001, Swartz violated Securian’s code six times by failing to complete his trades on the approval date, which is required by company policy.  Finally, in the fourth quarter of 2001, Swartz violated Securian’s policies by twice failing to complete personal trades on the approval date and by executing six personal trades without prior approval. 

Securian discharged Swartz in early March 2002 for failure to comply with company policies and procedures.  In mid-March the Department of Economic Security denied Swartz unemployment benefits.  The commissioner’s representative affirmed the denial, concluding that Swartz was discharged for misconduct within the meaning of the statute.  See Minn. Stat. § 268.095, subd. 6 (2002) (defining employment misconduct).  Swartz now appeals the commissioner’s decision.



            An employee discharged for misconduct is disqualified from receiving unemployment benefits.  Minn. Stat. § 268.095, subd. 4(1) (2002).  We review the factual findings of the commissioner’s representative in the light most favorable to the decision and determine whether evidence in the record reasonably tends to sustain those findings.  Lolling v. Midwest Patrol, 545 N.W.2d 372, 377 (Minn. 1996).  The ultimate determination of whether an employee was properly disqualified from receiving benefits, however, is a question of law, and appellate courts exercise independent judgment when deciding that question.  Id. 

            Employment misconduct is defined under Minnesota law as either intentional conduct in violation of the standards of behavior that the employer has a right to expect or negligent or indifferent conduct that shows a substantial lack of concern for the job.  Minn. Stat. § 268.095, subd. 6(a)(1), (a)(2) (2002).  A pattern of failing to follow policies and procedures and ignoring directions and requests demonstrates a substantial lack of concern for the employer’s interests.  Gilkeson v. Indus. Parts & Serv., Inc., 383 N.W.2d 448, 452 (Minn. App. 1986). 

            Swartz first argues that the record does not support the commissioner’s finding that he executed six personal securities trades in the third quarter of 2001 without receiving any approval.  The commissioner acknowledges that the sentence relating to the lack of “any” approval should properly have been listed in the fourth quarter violations rather than third quarter violations.  But the structural error in the findings is inconsequential because the commissioner’s finding that Swartz executed six trades without same-day approval is still correct.  The record confirms that Swartz executed six trades in the fourth quarter without any prior approval.  Swartz does not specifically challenge any other findings, and we conclude that the commissioner’s findings are reasonably supported by the record.

            Swartz’s second argument is that his failure to comply with the ethics code did not constitute misconduct because his failure to follow the code was unintentional.  Securian acknowledged in memoranda to Swartz that some of his acts may not have been intentional violations.  But negligent or indifferent conduct, even if unintentional, is still misconduct if it evidences a substantial lack of concern for the employer’s interests.  Minn. Stat. § 268.095, subd. 6(a)(2).

            Swartz attributes his violation of Securian’s “sixty-day rule” in the first quarter of 2001 to being unaware of the ethics code.  But Swartz  received a copy of the code in 2000.  Swartz claims his second quarter violations were unintentional because he did not understand that the sixty-day rule prohibited stock sales for a profit on the sixtieth day after the stock was purchased.  It is undisputed, however, that his previous written warning specifically referred him to the code of ethics and provided the name of a contact person in the event of questions.

            Swartz contends that his third quarter violations were unintentional because he did not realize that limit orders, which operate to purchase or sell stock when the stock reaches a desired price, must be completed on the approval date.  Securian “strongly discourages” employees from placing limit orders because of delay between approval and completion.  Further, the computer system used for obtaining trade approval clearly states the approval date for the requested transaction, which is not tied to the limit order.

            Swartz contends that his eight violations in the fourth quarter were also unintentional.  Two of the violations again related to limit orders, a type of violation for which he had been previously warned.  The other six unapproved trades occurred when the computerized approval system was not working.  Swartz apparently believed he could execute the trades without approval, despite the prohibition in the code of ethics.  And no documentation was provided to show that Swartz followed the manual method of trade approval, the alternative method that must be used when the computerized method of approval is not operational.

            The commissioner’s representative made findings that are reasonably supported by the record, and the record provides ample evidence that, even if Swartz’s actions were not intentional, he negligently initiated personal stock trades in violation of the employer’s code of ethics.  As a senior investment accountant working in a highly regulated industry, Swartz should have understood the importance of complying with Securian’s ethics code.  Swartz’s pattern of failing to follow Securian’s policies and procedures demonstrates a substantial disregard for Securian’s interest in complying with insider-trading regulations.