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.
Alan Stuart Pattee AWC/2010023232101/December 2011
Patel forged homeowner signatures on uniform mitigation verification
(UMVI forms) in connection with inspections performed by a
qualified inspector regarding
construction information; the form is submitted to the homeownerís
in connection with insurance pricing.Pattee forged the signatures
to accommodate his clients, who were either not at home at the
time of the inspection
or were his longtime clients.
acted as an officer for
a company formed to conduct inspections to determine homeowner
for compensation, without providing prompt written notice to his
member firm for this
outside business activity.
annual compliance online certifications for his firm representing
that he had complied with
the requirements of NASD Rule 3030 and for the certifications,
certified that no changes
were needed to his Form U4 or that he had requested appropriate
changes to the Form U4
regarding outside business activities.
In completing life insurance policy applications, Aqeel placed fictitious electronic funds transfer account numbers on the accounts of customer applicants that he knew were incorrect and submitted the applications for further processing; the fictitious numbers were actually variations of Aqeelís personal checking account number. Aqeel forged two customersísignatures on electronic signature authorization forms, bank authorization forms and/or acknowledgement forms, in completing their life insurance policy applications, without their knowledge or authorization.
Based on the submission of the applications, Aqeel received credit towards his compensation; the policies subsequently lapsed due to invalid account numbers.
Aqeel created a credit guarantee document purporting to be a fully executed and authenticsurety bond for $12,500,000 by including fictitious information, and used the documentin an attempt to secure funding for the development, ownership and management of a hotel project by an entity, and Aqeel was paid approximately $155,000 as a finderís fee.
Aqeel failed to timely respond to FINRA requests to appear for on-the-record testimony
Scott Andreu Roges AWC/2010024280601/December 2011
Roges falsified a customerís signature without the customerís
knowledge or consent in an
attempt to correct the customerís social security number and
beneficiaryís birth date on
an amendment to a fixed life insurance policy. The member firmís
WSPs specifically prohibited registered representatives from
falsifying and/or forging
customersí signatures on transaction documents and/or other
Scott Andreu Roges: Fined $5,000; Suspended 30 days
Rosas wrongfully converted a customerís funds totaling $14,000 for his personal use by submitting withdrawal requests he forged to his member firm and an annuity company without the customerís knowledge or consent. Rosas completed and forged other customersí signatures on variable annuity withdrawal forms and submitted them to annuity companies, without the customersí knowledge or consent, in an effort to convert funds totaling $45,000 from the customersí variable annuity accounts for his personal use.
As indicated on these forms, the funds were to be made payable to a limited liability company for which Rosas was the president and CEO. One of the annuity companies cancelled the withdrawal requests and the other annuity company placed stop payments on the checks that were issued.
Spotts wrongfully misappropriated approximately $197,860 from a coworker at his member firm by taking blank personal checks belonging to the coworker and forged the coworkerís name on the checks without the coworkerís knowledge or authorization. Spotts made some of the checks payable to himself and deposited the checks into his personal account, or made the checks payable to credit card companies and other creditors to pay his personal bills.
Spotts failed to appear and testify at an onthe- record interview.
David John Klecka Jr. (Principal) OS/2010021189601/September 2011
Klecka created a non-genuine email purporting to be from the Arizona Department of Insurance (AZ DOI) regarding the agencyís investigation into Kleckaís activities at his former firm, and then provided a copy of the email to the member firm with which he was associated.
Kleckaís firm commenced an internal investigation of Klecka concerning questionable business activities related to his sale of life insurance policies. During the course of the firmís review, it was learned that Klecka was the subject of an investigation being conducted by the state regarding activities that occurred while Klecka was associated with another member firm.
Klecka forwarded an email from his personal email address to his managing director at the firm --the forwarded email was purportedly from the state insurance department, which contained a timeline documenting Kleckaís contact with the agency, and the email bore what appeared to be the typed signature of an investigator with the AZ DOI. However, Klecka subsequently admitted that he was not truthful on the dates and fabricated the email to lead his firm to believe that the state investigation was more recent than it actually was. The forged document provided an explanation for Kleckaís failure to disclose the investigation to the firm earlier than he did.
The firm subsequently terminated Klecka for, among other reasons, creating a non-genuine email purporting to be from the AZ DOI regarding its investigation into Kleckaís activities at his former firm. In addition, Klecka failed to appear for a FINRA on-the-record interview.
Marilyn Geen Martindell AWC/2009020518901/September 2011
Martindell forged the signatures of her immediate supervisor and of her branch manager at her member firm.
Martindell signed the name of her supervisor, a firm financial advisor, to firm documents titled ďAdvice of TradeĒ letters without the financial advisorís authorization or consent and mailed the letters to the customers involved; each of these letters informed a firm customer of trades that had been effected in that customerís account.
Martindell signed her branch managerís name to an internal firm form authorizing the transfer of funds and securities from the account of a customer to a joint account held by the customer and the customerís relative. Martindell signed the branch managerís name on another internal firm form that memorialized the multiple names that another customer could use in signing documents related to his account.
Martindell completed an IRA distribution form for her own account in order to access funds held in that account and Martindell again signed her branch managerís name on this form. In addition, Martindell signed the branch managerís name on these forms without his authorization or consent, and submitted the forms for further processing.
Marilyn Geen Martindell : Fined $10,000; Suspended 6 months
Without authorization, Franz took possession of checks payable to the investment adviser firm where he was employed, deposited the checks, which totaled about $21,000, to a personal bank account, and converted a portion of the funds to his own use and benefit.
Franz was the broker of record for a money market mutual fund account that an investor owned, and while the investor was out of state and without his knowledge or authorization, Franz contacted the mutual fund company multiple times and instructed it to issue checks to the investor drawn against his money market account. The mutual fund company issued checks payable to the investor totaling about $271,250 and mailed them to the investorís residence in Ohio.
Franz obtained possession of the checks at the investorís residence and, without the investorís knowledge or authorization, Franz forged his signature on the checks, deposited the checks to a personal bank account and converted a portion of the funds to his own use and benefit and remitted the rest to the investor.
Vinas converted approximately $3.3 million from customers, mostly Mexico-based, while he was associated with member firms and served as the registered representative responsible for these customersí brokerage accounts.
Vinas asked customers to sign blank documents, including firm documents that were printed in English when none of the customers spoke or read English, but they complied with Vinasí request.
A variable credit line account was opened at Vinasí firm in the customersí name, and Vinas submitted or caused to be submitted applications requesting increases in the credit line that the firm approved, but the customers had not authorized the opening of the credit account or the subsequent credit increases, nor were they aware of the existence of the credit account. Vinas forged, or caused to be forged, customer signatures on Letters of Authorization (LOAs) and had a customer sign blank LOAs, which he submitted to his firm purportedly authorizing the transfer of customer funds without these customersí authorization or knowledge. Vinas submitted, or caused to be submitted, to another member firm fraudulent verbal LOAs without the customersí authorization or knowledge, which allowed him to wire funds from the customersí accounts. In addition, Vinas presented false account documents to the customers, which reflected fictitious account balances although he had closed the account after taking the last remaining funds from the account.
Vinas failed to respond to FINRA requests to appear and provide testimony.
Nicklas misappropriated $4,329.52 from his member firm. Nicklas wrote firm checks payable to himself, forged signatures on the checks and then deposited the checks into his personal trading account. Nicklas withdrew firm funds, without authorization, from automatic teller machines (ATMs)
Kinser converted approximately $330,000 in customerís funds. Kinser called the mutual fund company through which he had invested customerís funds to change the address on the account from the customerís residential address to Kinserís office address. At Kinserís request, the mutual fund company sent redemption checks drawn on the customerís account to Kinser without the customerís knowledge, consent or authorization, and Kinser forged the customerís signature on the checks, endorsed them to make them payable to him and deposited the funds in his own account. In order to conceal the conversions, Kinser fabricated account summaries and documents, including charts and statements purporting to reflect the customerís account balance, which he presented to the customer in periodic meetings, misleading the customer into believing all of his money was still invested in mutual funds and was still earning interest. Kinser failed to respond to FINRA requests for information and documents.
Ameriprise Financial Services, Inc. AWC/2008013648002/June 2011
Ameriprise failed to establish, maintain and enforce a supervisory system reasonably designed to detect and prevent one of its brokerís misconduct. The broker who was registered with the firm forged customersí signatures on various financial documents that he submitted to the firm for processing. The broker agreed to pay certain fees for customers without alerting the firm in order to avoid complaints from these customers. The broker agreed to a Bar.
An Ameriprise surveillance analyst became aware of potential forgeries by the broker and failed to follow up with a timely investigation, and the firmís supervisory system did not ensure that a timely investigation was conducted.
The firm had implemented a new set of procedures for its surveillance department through which the firm discovered that the investigation of the broker had not been completed, and the firm promptly reassigned the matter to other surveillance personnel. The firm completed its investigation of the broker nearly two and a half years after it first opened the investigation and found ample evidence of repeated forgeries by the broker, whose employment was then terminated.
Ameriprise Financial Services, Inc. : Censured; Fined $50,000
Cooper forged a LOA for a customer by copying the customerís signature from another document and pasting it on the LOA. Cooper used the forged LOA to authorize the transfer of assets from the customerís account into another customerís account, which was a trust account Cooperís relativesí controlled. Based on the forged LOA, Cooperís member firm transferred securities valued at $19,632.35 from the customerís account into the other account without the customerís knowledge or authorization.
Orendorff failed to respond to FINRA requests to appear for an on-the-record interview.
Further, Orendorff, in an attempt to correct errors made on a customerís signed asset transfer disclosure form that his firm had returned to him for correction and resubmission obtained the customerís signature on a blank asset transfer disclosure form, affixed the customerís signature from the blank form to revised forms and submitted the forms to his member firm instead of having the customer sign a corrected form. When the firm questioned Orendorff about the documents, he admitted to altering and submitting them. Thereafter, the firm terminated Orendorffís employment because the firm prohibited its representatives from affixing signatures to documents and required original signatures on each form.
Evans converted securities and funds in the joint brokerage account of customers, without their knowledge, authorization or consent, and deposited the funds into his personal checking account, converting an aggregate total of $60,000.
Evans forged a customerís signature on checks linked to the customersí bank account and made the checks payable to ďcashĒ or to himself. Evans forged the customerís signature on a cash withdrawal form linked to the customersí bank account. Without the customersí knowledge, authorization or consent, Evans sold securities totaling $30,000 from their brokerage account, transferred $10,000 to their bank deposit account and applied $10,000 to their brokerage account margin balance.
Evans failed to respond to FINRA requests for a signed, written statement regarding its investigation.
Michael Wayne Evans : No restitution sought by FINRA because Evan's former firm reimbursed full losses; Barred.
NOTE: Evans reimbursed his former firm approximately $47,000 of the $60,000 that he misappropriated from the customers and is in the process of earning the remaining $13,000.
Robert Joseph Oftring (Principal) AWC/2009019996501/June 2011
Oftring was responsible for supervising a former registered representative of his member firm and failed to take appropriate action to reasonably supervise her to detect and prevent her violations and achieve compliance with applicable rules in connection with a customerís account. Among other things, Oftring failed to take reasonable steps to follow up on certain indications of potential misconduct that should have alerted him to the representativeís violations.
The representative engaged in excessive, short-term trading in the customerís account, which resulted in losses of approximately $60,000; the account was subject to frequent margin calls and transfers from a third-party account to satisfy margin calls in the account, and once, the representative transferred funds back to the third-party account by forging the customerís signature on an LOA.
Oftring was aware of
the active trading in the customerís account and knew that the representative was effecting securities transactions in the account while it had a negative balance, but he never stopped the representative from trading and never contacted the customer to discuss the activity; and
and approved the transfer of funds between the customerís account and the third-party account, and accepted the representativeís explanation for the same without contacting the customers involved in the transfers.
Robert Joseph Oftring (Principal): FIned $5,000; Suspended 6 months in Principal capacity only
Madrigal misappropriated $102,054.55 from customersí bank accounts by using forged customer signatures on partial withdrawal general ledger tickets. Madrigal admitted to his member that he had engaged in this misconduct but then failed to respond to FINRA requests for information.
RR falsely prepared a letter on the letterhead of one of his member firmís institutional customers without the customerís or firmís knowledge or authorization. RR addressed the letter to the customerís plan vendor, directing the plan vendor to change the commission split on the customerís 457 plan to reflect that RR would receive a 100 percent commission; originally, the customerís plan revenue reflected a commission split of 96 percent to RR and 4 percent to another registered representative.
RRís member firm agreed to have commission revenues flow solely to him in the short term after the other registered representative resigned, but advised him that he needed to obtain a letter from the customer acknowledging his role as the sole broker of record due to the other registered representativeís resignation. The letter purportedly authorized RR to receive 100 percent of the commission from the plan revenue, and RR forged the signature of the customerís plan controller without her knowledge or authorization. RRís firm policy prohibits a registered representative from signing a customerís signature to any paperwork, regardless of whether the customer has given permission to do so, and prohibits a registered representative from signing a clientís name on any form, with or without the clientís authorization.
Charles Joseph Fiorucci AWC/2010022424201)/April 2011
Fiorucci relocated his business from a broker-dealer in one state to a broker-dealer in another state, and during the process of moving his customer accounts, Fiorucci falsified customer signatures on new account forms and change in broker-dealer forms. These customers consented to his signing these documents on their behalf, but others did not. The firmís written supervisory procedures specifically prohibited registered representatives from falsifying and/or forging customersí signatures on transaction documents and/or other documents.
Charles Joseph Fiorucci : Fined $5,000; Suspended 6 months
Shah made unauthorized foreign currency trades in a customer bank account, resulting in margin calls being generated for the account and consequently the customerís other bank accounts were frozen, preventing the customer from transferring funds from those accounts. Shah made unauthorized money transfers from another customerís bank account to satisfy, in part, the margin calls for the first client and to be able to transfer funds at its request.
In order to effect the unauthorized fund transfers, Shah forged a signature and created falsified Letters of Authorization (LOAs) by cutting a bank directorís signature from an account opening document and pasting it on a fabricated LOA. Shah fabricated documents regarding another clientís obligation to meet capital calls and falsely created a memorandum representing that the capital calls had been met.
Shah falsely told the customerís beneficial owner that all outstanding calls had been met and to ignore notices he too was receiving. To make the memorandum appear authentic, Shah fabricated an internal email address for a fictitious employee and sent the memorandum to the beneficial owner to make him believe that the calls had been met.
Shah failed to respond to FINRA requests to provide on-the-record testimony and to provide a signed statement.
Stuart Phillip Miller AWC/2009018219101/March 2011
Miller and another individual were trainees in a member firmís professional development program and formed a partnership through which they jointly solicited and handled customer accounts as well as splitting any production credits that either generated.
As part of their efforts to attract clients, Miller and the individual created a spreadsheet that set a model fund portfolio that they either presented to potential customers during meetings or sent by email or mail to prospective customers. Miller and the individual sent a version of their model fund portfolio that included a mix of conservative and risky securities along with a chart of history of returns the individual securities and overall portfolio earned; Miller and the individual, in some communications with potential customers, misrepresented that this was a portfolio that they managed and that the stated returns were their returns. Neither Miller nor the individual sought or received a firm supervisorís prior approval for the use of the model fund portfolio or permission of its dissemination, nor was the model portfolioís spreadsheet filed with FINRAís Advertising Regulation Department, within 10 business days after first dissemination of the material as required.
The model fund portfolios did not include any information regarding the risks associated with the funds, and the chart did not include a sound basis for the performance evaluation for each of the securities included in the portfolio. The model portfolio failed to identify or to display in a prominent fashion Millerís and the other individualís association with their firm. In addition,
Miller had his assistant type up a stop transfer letter and he forged the customerís signature on the letter meant to prevent the customer from transferring his account to another firm. Moreover,Miller admitted to his branch manager that he had forged the stop transfer request and the firm immediately terminated Millerís employment.
Stuart Phillip Miller : Fined $10,000; Suspended 1 year
Dennis OíNeal Blackstone (Principal) 2009020488001/AWC/February 2011
As the registered representative on the joint securities account of customers at his member firm, Blackstone created a false Letter of Authorization (LOA), without the customersí knowledge or authorization, and forged their signatures to authorize a transfer of funds from their joint account at the firm to a bank account that Blackstone controlled. Based on the forged LOA, the firm wired $28,320 from the customersí joint account to the bank account Blackstone controlled and, after receiving the funds in his bank account, Blackstone used the funds for his personal expenses.
Gregory James Buchholz AWC/2010023931401/February 2011
Buchholz misappropriated approximately $1,350,000 from customers, a number of whom were retirees, by liquidating their variable annuities and/or mutual funds and then transferring the proceeds to his personal bank account, converting the proceeds for his own use and benefit. As part of this scheme, Buchholz falsely and fraudulently represented, at times by forging customer signatures on redemption documents, that certain customers had authorized the redemption of the securities in order to obtain the proceeds of the sale; fraudulently induced certain customers to authorize the redemption of securities, based on misrepresentations that the proceeds would be reinvested to the customersí investment accounts; and caused checks to be drawn in the customersí names and caused the checks to be sent directly either to his office or to the customers.
If the checks were sent directly
to the customers, Buchholz convinced those clients to turn the checks over to him, making false and fraudulent representations that he would deposit the funds in their securities accounts to be reinvested; however, he did not reinvest the proceeds but instead deposited the checks into his personal bank accounts and used the proceeds for his own purpose;
to his office, Buchholz simply deposited the checks in his own bank accounts for his personal use and sometimes forged the customersí signatures in order to cash the checks.
Randall Edgar Robinson II AWC/2010022635301/February 2011
While serving as a licensed insurance agent, Robinson created fictitious property and casualty insurance policies in order to meet production goals with his firmís affiliated insurance company. Robinson did so by forging customer signatures or otherwise falsifying insurance application forms and related documents. Thefirmís affiliated insurance company paid Robinson approximately $16,000 in commissions as a result of the fictitious policies.
Thomas Jones Charles Jr. 2008016036901/February 2011
Charles sold variable universal life insurance products to his member firmís customers and after leaving the firm, Charles remained the assigned representative on the accounts and received modest annual ďtrailing commissions.Ē Charlesí former firm asked him to pay a ďsingle appointmentĒ fee of $100 to the firm or submit customer-signed ďTelephone or Electronic Transaction AuthorizationĒ forms for him to continue to service the customersí accounts. Charles chose to do neither, but when he realized the deadline was approaching, he signed the customersí names on the authorization forms without the customersí permission and sent them to the firm via facsimile.
One of the customers complained that Charles had not being authorized to sign her name on the authorization form; therefore, Charlesí former firm notified Charles and his present firm of the customerís allegation and asked Charles for a written explanation. During Charlesí present firmís investigation into the complaint, he made misstatements, verbally and in writing, to the firm, denying forging the signatures and fabricating a story to prevent the firm from discovering his misconduct. Also, Charles subsequently admitted to the firm that his alibi was false and that he signed the customersí names without authorization.
Thomas Jones Charles Jr. : Fined $35,000; Suspended 1 year
Antonio Herrero-Rovira (Principal) 2008013833601/January 2011
Herrero-Rovira converted approximately $203,000 in customer funds by forging customersí signatures on Letters of Authorization (LOAs) and firm checks issued pursuant to the LOAs, and depositing the checks into his personal bank account or othersí account without the customersí knowledge or authorization.
Herrero-Rovira converted an additional $16,000 from a customer by causing a check payable to the customer in that amount to be withdrawn from the customerís account without the customerís knowledge or authorization, and forging the customerís check endorsement.
Herrero-Rovira failed to respond to FINRA requests for information.
As her member firmís bookkeeper, Associated Person Givens, had access to the firmís checking account and forged the firmís treasurerís signature on checks totaling approximately $61,016.08 written against the firmís checking account. Givens committed conversion by making the checks payable to herself, cashing the checks and using the funds for purposes other than the firmís benefit. Because Givens reconciled the firmís checking account, she was able to conceal the conversion of funds from the firm. In a letter to FINRA, Givens admitted that she utilized the treasurerís name without authorization and took the firmís funds for her personal use.
It would seem a fairly basic premise of FINRA regulation that you can't act as the President of a broker-dealer unless you're registered as a principal. Of course, stuff happens and, you know, sometimes a member firm didn't realize that someone was taking on a senior role requiring principal registration, and, other times, someone thought that the guy w... Read On