Enforcement Actions
Financial Industry Regulatory Authority (FINRA)
CASES OF NOTE
2012
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.
January 2012 - View all for this month
Cleves Richard Delp (Principal)
AWC/2009018233802
AWC/2009018233802
Delp failed to
provide prompt written notice to his member firm that he was
employed by, or accepted
compensation from, another person as a result of outside business
activities.
Delp was a shareholder and employee of an independent
insurance agency and
he disclosed his outside life insurance business activity to his
firm when he joined. As part
of his outside life insurance business, Delp brokered fixed-term
or whole life settlements
for his insurance customers, and his insurance agency received a
commission for most
of the life settlement transactions it brokered.
Many years
after Delp joined the firm and disclosed his outside business
activity, the firm revised its
WSPs to prohibit its registered representatives from participating
in life settlements unless
processed through the firm and limited to products the firm
offered through approved
firm sponsors. Delp’s outside business insurance company
facilitated insurance company
customers’ sales of fixed-term or whole life insurance policies to
third-party companies.
The life settlements were not brokered through the firm and most
were not brokered with
approved firm sponsors, as required by the firm’s revised
procedures.
Delp formed a company in which he owned a
half-interest. The company’s
business was to negotiate, on behalf of Delp and other
participating individual insurance
brokers, commission rates from life insurance companies for
insurance policies that they
brokered. Delp failed to reasonably enforce his
firm’s WSPs prohibiting
its registered representatives from participating in life
settlements, except with certain
limitations. Delp’s supervisory failure allowed another registered
representative in the
branch office that Delp supervised to also broker life settlement
transactions for several
years.
Cleves Richard Delp (Principal): Fined $20,000; Suspended 30 business days
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