Enforcement Actions
Financial Industry Regulatory Authority (FINRA)
CASES OF NOTE
2011
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.
November 2011
Daniel Lee Puplava (Principal)
AWC/2007010991901/November 2011

Puplavaís non-registered assistant had access to his signature guarantee stamp, and without Puplavaís knowledge, permitted the member firmís registered representatives to use the signature guarantee stamp to approve securities business-related transactions and paperwork that required a signature guarantee stamp. Puplava discovered this practice and instructed his non-registered assistant and the registered representatives involved to discontinue the practice, but Puplava did not take back his signature guarantee stamp or take steps to otherwise secure the stamp to prevent its misuse. Puplava had customers sign blank securities business-related forms, including non-brokerage change request forms, mutual fund transfer forms and securities account forms, and retained these forms in his customer files contrary to his member firmís prohibition against this practice.

Daniel Lee Puplava (Principal): Fined $7,000; Suspended 3 months in all capacities; Suspended 20 business days in Principal/Supervisory capacities only
Tags:  Blank Forms    Signature     |    In: Cases of Note : FINRA
October 2011
Markus Beat Pletscher
AWC/2009019969801/October 2011

Pletscher exercised discretion in customer accounts despite the fact that his member firmís WSPs strictly prohibited discretionary trading in customer accounts, and he was aware of this prohibition.

The firm required that its registered representatives place trade orders immediately after receiving the customerís authorization for trades, but at times Pletscher received oral authorization from customers to place trades in their accounts, yet he waited several weeks or months before placing the trades.

Pletscher requested to have variable annuity holdings for customers transferred into money market accounts without the customersí authorization.  The customers requested the unauthorized transactions be reversed, causing his firm to incur reversal fees of $8,863.37.

Pletscherís firm required its customers review and sign transaction related forms, but Pletscher instructed customers to provide transaction forms that contained only the customersí signatures, which Pletscher later completed and submitted to the firm for processing, despite his firm prohibiting him from accepting incomplete forms from customers. Pletscher knew that by allowing his customers to pre-sign blank forms, he failed to ensure that customers had properly reviewed and understood the agreements they had signed. In addition, Pletscher caused the firmís books and records to be false and misleading and to appear that the customers had agreed to the terms of each form on the date the forms were signed in blank.

Markus Beat Pletscher: Fined $15,000; Suspended 1 year
Tags:  Blank Forms    Annuities    Discretion     |    In: Cases of Note : FINRA
May 2011
Joshua Daniel Gould
AWC/2010024945501/May 2011

Gould converted more than $1,315,000 from customers who had purchased annuities from him by, among other deceptive means and devices, convincing his customers to sign blank annuity withdrawal request forms, which he subsequently completed with instructions to the insurance companies to transfer his customersí funds to a bank account held in the name of a company he owned and controlled. In some instances, the withdrawal request forms contained a medallion signature guarantee that he improperly obtained.

Gould converted funds from other annuity customers by using withdrawal request forms that contained customersí signatures to direct insurance companies to transfer funds from the customersí annuities to his bank account. Gould unlawfully converted customer funds from customersí brokerage accounts by, among other deceptive means and devices, improperly transferring funds from their brokerage accounts to the bank account he owned and controlled. The customers either did not authorize or were not aware of the conversion resulting from the transfer of funds from their annuities and brokerage accounts to Gouldís bank account.

Gould used the unlawfully converted funds to pay for his own personal and business expenses; none of the customers were aware he was withdrawing funds for his personal use. On numerous occasions, Gould falsified documents to make it appear that customers had authorized the transfer of funds from their annuities and brokerage accounts to his bank account, and in some instances, effectuated these transfers by convincing customers to sign withdrawal request forms, some of which were blank.

Joshua Daniel Gould : Barred
Tags:  Annuities    Blank Forms    Signature    Bank     |    In: Cases of Note : FINRA
January 2011
Edmond Sloan Duvall
AWC/2008015702201/January 2011

Over a period of 10 years or longer, in face-to-face meetings with customers, Duvall had the customers supply account forms signed in blank, to support transactions the customers authorized. After obtaining information needed to complete the transactions, Duvall completed the forms and submitted them to his member firm for processing; but in some cases, he retained the blank, signed forms.

Duvallís firm prohibited staff from obtaining or retaining documents the customers pre-signed, and Duvall was aware of the prohibition. Duvall caused his firm to violate NASD Rule 3110 in that he caused the firmís books and records relating to customer accounts to be inaccurate.

Edmond Sloan Duvall: No fine in light of financial status; Suspended 12 months
Tags:  Blank Forms     |    In: Cases of Note : FINRA
Enforcement Actions
Tags
Email Bill Singer Connect with Bill Singer on Facebook Follow Bill Singer on Twitter Link up with Bill Singer on LinkedIn Join Bill Singer on Google+