RRBDLAW.com

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.
December 2011
Amir Aqeel
OS/2008012703401/December 2011
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
Amir Aqeel: Suspended 2 years
Tags:  Signature    Life Insurance    Forgery     |    In: Cases of Note : FINRA
John Daniel Abbruzzese
AWC/2010021144501/December 2011
Abbruzzese recommended that a customer purchase a variable annuity with the proceeds of his relativeís Individual Retirement Account (IRA). The customer had executed the application for a qualified annuity and shortly thereafter it was determined that the customer could not use the funds to purchase a qualified annuity. 

Abbruzzese copied the customerís signature, without his authorization, knowledge or consent, from an earlier letter, and pasted it on the variable annuity application to authorize the change from a qualified annuity to a non-qualified annuity

Abbruzzese recommended that another customer purchase a variable annuity. The customer had entered into a reverse mortgage on her home and was referred to Abbruzzese to invest some of the proceeds to generate income for her retirement. Abbruzzese completed the variable annuity application and represented that the source of the funds was the sale of real estate, rather than a reverse mortgage, because his member firm did not permit brokers to recommend reverse mortgages. By including inaccurate information on the customerís variable annuity application, Abbruzzese prevented the firm from maintaining accurate books and records and from assessingthe suitability of his recommendations to the customers.

Abbruzzese failed to timely respond to FINRA requests for information and documents untilhe appeared for on-the-record testimony.
John Daniel Abbruzzese: FIned $15,000; Suspended 18 months
Tags:  Signature    IRA    Reverse Mortgage     |    In: Cases of Note : FINRA
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 documents
Scott Andreu Roges: Fined $5,000; Suspended 30 days
Tags:  Life Insurance    Forgery    Signature     |    In: Cases of Note : FINRA
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
Gavin Michael Wilson
AWC/2011027249601/November 2011
Wilson falsified a customerís signature on an account transfer form.

A new registered representative joined Wilsonís member firm and sought to transfer her securities holdings at another broker-dealer to an account at the firm. In order to effectuate the transfer, the new registered representative signed an account transfer form authorizing the transfer in-kind of her securities holdings. 

Wilson was responsible for ensuring that the transfer was made consistent with the customerís instructions, as reflected in the signed transfer form. Shortly after submitting the transfer form for processing, Wilson received notification from the broker-dealer holding the registered representativeís securities that her holdings could not be transferred in-kind. Rather than communicating this issue to the customer, Wilson transposed a copy of the registered representativeís signature onto a new transfer form requesting liquidation of her securities and submitted the falsified transfer for processing, causing liquidation of her securities, without her authorization or consent
Gavin Michael Wilson: Fined $5,000; Suspended 6 months
Tags:  Signature     |    In: Cases of Note : FINRA
October 2011
Lonnie Lee Dusenberry
AWC/2010022516401/October 2011

Dusenberry borrowed $742,500 from his customers and, in several instances, Dusenberry used the proceeds of one loan to repay an earlier loan from a different customer. Dusenberry failed to repay a total of approximately $500,000 to his customers.

The firm prohibited borrowing money from customers unless the borrowing arrangement fell within certain enumerated exceptions, such as a loan from an immediately family member; regardless of the circumstances, however, employees were required to obtain the firmís written pre-approval for all loans, and Dusenberry neither requested nor received the firmís written pre-approval for any of his loans.

In order to effect one of the loans, Dusenberry signed the customerís name to a Letter of Authorization (LOA) and submitted it to the firm, which caused the firm to transfer $30,000 from the customerís account to another customerís account. In order to effect a loan from a different customer, Dusenberry signed that customerís name to an LOA without her knowledge, authorization or consent, and submitted it to the firm, which caused the firm to transfer $32,000 from the customerís account to another customerís account.

Lonnie Lee Dusenberry : Barred
Tags:  Borrowing    LOA    Signature     |    In: Cases of Note : FINRA
Bill Singer's Comment
Whoa, $500,000 in prohibited customer borrowing.  This guy wasn't kidding around.
Vikas Goel
AWC/2009020539701/October 2011

Goel placed a customerís signature on statements he prepared in connection with providing a rationale for his recommendations that the customer sell mutual funds and invest the proceeds in an equity-indexed annuity and a variable annuity, without the customerís knowledge, authorization or consent.

Unbeknownst to Goel, the firm did not require a customerís signature on the registered representativeís statement of rationale.

Vikas Goel : Fined $7,500; Suspended 1 month
Tags:  Annuities    EIA    Signature     |    In: Cases of Note : FINRA
Bill Singer's Comment
How ironic!  Didn't need to do it, did it, and gets fined/suspended.
September 2011
Carmela Lina Moro Knieriem
AWC/2010024724901/September 2011
Knieriem was a registered customer service associate in a branch of her member firm, where she was assigned to assist branch financial advisors and other employees, including the branch manager, with administrative duties, including preparation of certain internal administrative forms in documenting and processing requests the branch manager or financial advisor received verbally from a customer. Knieriem prepared the forms for approval and signed the names of the relevant firm employee who received the verbal instruction without authorization to sign the forms and submitted them for processing.
Carmela Lina Moro Knieriem : Fined $5,000; Suspended 60 days
Tags:  Signature     |    In: Cases of Note : FINRA
Bill Singer's Comment

I keep re-reading the charge here and, frankly, I find myself scratching my head because although I think that I understand, to a limited extent, what happened here, I'm not exactly sure I understand how this added up to both a $5,000 fine and a 60-day suspension. 

The customer service representative prepared an internal administrative form (that's worth repeating: it's an internal form that's used only for administrative purposes).  This form was used to document and process for branch managers and FAs,  requests received "verbally" from a customer.  FINRA charged this service rep for preparing the form that apparently accurately reflected the customer's verbal request but the service rep engaged in the apparently violative activity of signing the manager/FA's name on the internal administrative form. 

I'd like to know how many other service reps at this member firm had engaged in this same "signing" practice and for how long.  I'd also like to know whether it's FINRA's position that the managers and FAs involved were shocked, absolutely shocked, when they learned that all of these customer requests were processed without their signatures -- and then I'd like to know just how the hell those managers and FAs thought the requests were submitted on those forms if they hadn't signed them.

When I looked up the underlying AWC, I learned that FINRA charged Knieriem with having engaged in the misconduct between March and September 2010 (that's six months) and having submitted ten "forged" forms on behalf of three FAs and one manager.

As you can tell, I'm not exactly thrilled with what I view as the harsh nature of this sanction.  It may be justified but not solely based upon the facts presented by FINRA, as far as I'm concerned.

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
Tags:  Forgery    Signature     |    In: Cases of Note : FINRA
August 2011
Chadwick Monti Laskey
AWC/2010023259201/August 2011

Laskey signed representativesí names on forms related to customer accounts without the representativesí authorization or consent in order to expedite the customersí paperwork.

Laskey was the representativesí assistant. The documents were new account forms, disclosure forms and Individual Retirement Account (IRA) distribution request forms. The customers had signed the forms and authorized the transactions, and the representatives knew about the transactions but neglected to sign the documents.

Chadwick Monti Laskey : Fined $5,000; Suspended 3 months
Tags:  Signature     |    In: Cases of Note : FINRA
Bill Singer's Comment
Three months seems a tad excessive given the facts in this case, particularly on top of the $5,000 fine
July 2011
Dane Raymond Henry
AWC/2009018021801/July 2011

Henry added information to an earlier copy of a private placement investor questionnaire that had previously been signed by a customer. The questionnaire itself had been completed by the customer while Henry was registered with a prior member firm and was later replaced at that prior firm by a different version; Henry maintained a copy of the earlier signed copy.

In response to an inquiry made by Henryís new firmís CCO regarding the source of a particular stock in the customerís account, Henry utilized the earlier copy of the previously signed questionnaire from the customer that Henry had in his files and made alterations to the document by adding on the updated requested information sought by the CCO. Henry presented that altered document to the CCO without disclosing that he had made the alterations and by making the alterations to the questionnaire, he caused the document and, consequently, the firmís records to be inaccurate.

Dane Raymond Henry: Fined $5,000; Suspended 30 business days
Tags:  Private Placement    Signature     |    In: Cases of Note : FINRA
Bill Singer's Comment
So wrong on so many levels -- Henry is a lucky fellow, the suspension could have been far worse.
June 2011
Freddy A. Medina
2009016551301/June 2011
Medina falsified an account application by copying a customerís signature from a document she had previously signed and then cut-and-pasted the signature on to the account application without her knowledge, authorization or consent. Medina presented the falsified application to his member firm without disclosing that the customer had not actually signed it, thus causing his firm to retain and preserve a false and/or inaccurate record.
Freddy A. Medina : Censured; Fined $10,000
Tags:  Signature     |    In: Cases of Note : FINRA
Bill Singer's Comment
No matter how often I report on these cut-and-pasted signature cases, I still shake my head and, okay, I admit it, chuckle.  I mean, geez, it's 2011 and with all the readily available scanners and computer software, folks are still cutting and pasting?
Joseph Stephen Orendorff
2009016698303/June 2011

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.

Joseph Stephen Orendorff : Barred
Tags:  Forgery    Signature     |    In: Cases of Note : FINRA
Bill Singer's Comment
An all too common story that underscores the maxim: The road to Hell is paved with good intentions. No matter how annoying or inconvenient, just get the customer's signature on the original.  If you engage in self help and get caught, it ain't gonna end pretty.
May 2011
Edward Charles Bartlett III
AWC/2009019969201/May 2011

Bartlett signed customersí names to documents related to purchases of mutual funds and insurance products without authorization.  Although the customers authorized Bartlett to purchase the securities or insurance products for them, only one of the customers orally authorized Bartlett to sign his name.

Bartlett signed customersí names to new account applications, client profiles, risk questionnaires, insurance applications and transaction confirmation forms. In one instance, Bartlett forged a customerís name because he was concerned that he would lose a substantial commission if he went back to the customer to obtain her signature on a form.

Edward Charles Bartlett III: Fined $5,000; Suspended 5 months
Tags:  Signature    Mutual Funds    Insurance    Signature     |    In: Cases of Note : FINRA
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
Robin Bruce Davidson (Principal)
OS/2008016063601/May 2011

Davidson recommended and participated in securities transactions outside the scope of his employment with his member firm when he recommended that clients, nearly all of whom were firm customers, participate in a managed foreign currency exchange-trading program; these clients invested $2,682,518.19, for which he received $3,894.64 in compensation for the referrals.

Davidson did not provide prior written notice, or any notice at all, to the firm of his involvement with the transactions, nor was the firm aware of Davidsonís recommendations and referrals until two months after his resignation when a customer complained about her losses. The clients Davidson referred to the securities transactions lost more than $2.4 million of the approximately $2.68 million they had invested in the managed foreign currency exchange-trading program.

Davidson signed a customerís name to multiple account-related documents without her knowledge or consent.

Robin Bruce Davidson (Principal): Fined $10,000; Suspended 16 months
Tags:  FOREX    Signature     |    In: Cases of Note : FINRA
Bill Singer's Comment
Again, I must be getting quite ornery in my old age. This is the second case this month that the sanctions seem on the light side to me.  Davidson not only failed to disclose his outside FOREX activities but he managed to get his customers into a program that lost $2.4 million.  Lucky for him, I'm not doling out the dollars and months of suspensions.
April 2011
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
Tags:  Forgery    Signature     |    In: Cases of Note : FINRA
Bill Singer's Comment
My, what a surprise -- the firm's written supervisory procedures specifically prohibited its RRs from forgery.  I mean, seriously, does FINRA really need to get one last shot in against this guy?  Isn't it enough to note that he falsified documents and forged signatures? As if, what? those two factors wouldn't have constituted a violation but for the fact that they were also in violation of specific WSP prohibitions? Talk about gilding a lily!
Linda Louise Johnson
AWC/2010021494801/April 2011

Johnson affixed the signatures of members of the public on documents to open a joint account and transfer mutual fund shares into the account, without their knowledge and consent, and submitted the forms to her member firm for processing. Johnson had a registered sales assistant execute a ďSignature GuaranteeĒ for the customersí signatures on the account transfer forms, based on Johnsonís representation to the assistant that she witnessed the customers sign the documents, which she knew was not true. During all relevant times, Johnsonís firm had a policy which prohibited representatives from signing documents or requesting anyone to sign documents on another personís behalf, even if that person gave permission to do so. Johnson affixed one of the customerís signature on a Letter of Instruction, which directed a member firm to sell $25,000 worth of the mutual fund that the customer owned, and forward the proceeds to Johnson. Although the customer authorized the transaction, Johnson affixed the customerís signature to the document without the customerís knowledge or consent, and bypassed her firmís internal procedures requiring its operations department to review the document prior to submission to the mutual fund.

Johnson altered portions of an Individual Retirement Account (IRA) Distribution Request Form that another customer had completed by changing the date and dollar amount on the form; she then submitted the altered form for a distribution of funds. Although the customer authorized the distribution of funds, Johnson altered the form without the customerís knowledge and consent.

Linda Louise Johnson : Fined $5,000; Suspended 6 months
Tags:  Signature     |    In: Cases of Note : FINRA
Bill Singer's Comment
Time and time again we see the costs of these administrative short-cuts.  About the only saving grace in this case is that FINRA seems to have exercised commendable restraint and imposed a relatively modest fine and suspension.  But for the specific facts that spoke to the "well-intentioned" nature of the RR's conduct, this could have had a far worse outcome.
Susan Mae Karn
AWC/2010022067901/April 2011

Karn allowed a customer to sign relativesí names on life insurance applications, and before Karn submitted them for processing, she signed the insurance applications and certified that she had witnessed each of the proposed signatures on the insurance applications. Karn falsely certified on the Representativeís Information Supplement document for each insurance application that she had personally seen each proposed insured at the time the application was completed.

One of Karnís clients completed an application to purchase a municipal bond fund by signing her name on an electronic signature pad, and later that same day, Karn signed the clientís name on the electronic signature pad and thereby affixed the clientís signature on an application without the clientís authorization, consent or knowledge. The application Karnís member firm processed and sent to the client reflected the signature Karn had affixed rather than the clientís authentic signature. When the firm questioned Karn about the authenticity of the clientís signature, Karn initially stated it was the clientís original signature, but when questioned further, admitted she had signed the clientís name and in doing so, Karn misled her firm during its internal investigation into a customer complaint.

Susan Mae Karn : Fined $5,000; Suspended 6 months
Tags:  Signature    Electronic Storage    Insurance     |    In: Cases of Note : FINRA
Bill Singer's Comment
Not exactly the clearest of explanations. FINRA says that the client completed an application "by signing her name on an electronic signature pad . . ." However, it then suggests that Karn did something wrong by signing the client's name on the electronic signature pad. I'm lost. Did the client electronically sign her name on the application to purchased the bond fund or not? What happened to the client's signature?  Although I can likely infer some of the answers, it would be preferable if this report took a bit more time to set out the salient facts.
March 2011
Christina Marie Neumeyer
AWC/2009018415201/March 2011

Neumeyer affixed customer signatures and a registered representativeís name on documents without their knowledge or consent. During the course of routine review of account documents, Neumeyerís member firm notified a registered representative whom Neumeyer assisted, that corrections were necessary on certain account documents, including obtaining customer signatures on forms for a number of accounts. Neumeyer sent by fax to her firm the documents with corrections that had been requested and upon review of the account documents that Neumeyer faxed, certain customer signatures were identified as appearing to have been cut and pasted on to the forms.

When Neumeyer was questioned about the suspected falsified documents, she admitted to altering the documentation for a customer, by cutting and pasting the customerís signature on separate forms without the customerís knowledge or consent; the forms included disclosures about the nature of the customerís investments.Neumeyer also signed the name of the registered representative whom she assisted on numerous different documents for a number of different customers. The forms on which Neumeyer signed the registered representativeís name were acknowledgments that the registered representative reviewed the customer account documents ďfor completeness, accuracy, suitability and proper disclosuresĒ and acknowledgments that the registered representative had scrutinized the customerís information in compliance with the Office of Foreign Asset Control (OFAC) and the customer identification program (CIP), relating to the firmís compliance with AML rules.

Christina Marie Neumeyer : Fined $5,000; Suspended 30 days
Tags:  Signature    AML     |    In: Cases of Note : FINRA
Christine Mary Ryerson (Principal)
AWC/2009020567801/March 2011

Even though she was a licensed insurance producer, Ryerson signed her own name as the ďproducerĒ or ďagentĒ on annuity application transfer and exchange forms when, in fact, she was not the producer or agent on those particular applications. Ryerson signed the documents for the benefit of a person who, as Ryerson knew, sought to conceal his identity from his member firm as the true agent on those documents. Ryerson misidentified herself as the ďproducerĒ or ďagentĒ on annuity application transfer and exchange forms for other insurance agents as well under similar circumstances.

Ryerson failed to produce some of the information FINRA requested.

Christine Mary Ryerson (Principal): Barred
Tags:  Insurance    Signature     |    In: Cases of Note : FINRA
David Wayne Bombard
AWC/2009019977001/March 2011
Bombard signed customer names to insurance disclosure forms and disclosure statements in order to avoid meeting with the customers in person, in violation of New York State Department of Insurance Regulation 60, which requires that when agents sell annuity products, they complete a Definition of a Replacement Form, a Disclosure Form and a Disclosure Statement with the applicant signing each one. The customers intended to purchase the annuity products from Bombard notwithstanding their failure to sign the required documents.
David Wayne Bombard : Censured; Fined $5,000; Suspended 6 months
Tags:  Regulation 60    Signature    Insurance     |    In: Cases of Note : FINRA
Bill Singer's Comment
See this for prior commentary: http://www.rrbdlaw.com/2007/Regulation60.htm
Dustin Kent Jefferies (Principal)
AWC/2009018919701/March 2011

Jefferies signed or traced customersí signatures on applications to purchase life insurance or critical care insurance through an electronic application system available at his member firm, without the customersí knowledge or consent and contrary to firm policy. Jefferies submitted life insurance applications for fictitious customers and, along with creating fictitious customer names and addresses, he created fictitious social security numbers, driverís license numbers and other information about the purported customers. Jefferies submitted these applications for fictitious customers in order to give the appearance that he was meeting his required production for insurance policies sold. When Jefferies submitted each of the fictitious applications, he listed fictitious credit card numbers made up of all zeros for the initial premium payment, knowing that the credit card would be rejected with no payment being collected or the customers billed, while at the same time, his firm would give him immediate credit for submitting a new insurance policy.

When questioned by his manager about the applications, Jefferies initially denied having any knowledge of the practice and when later pressured by his manager, he then offered that newer agents may have been engaged in the activity. Only after his manager noted that almost all of the applications with zeros for credit card numbers were submitted from his office that Jefferies admitted to his misconduct, stating he did so because the applications would be credited to his production numbers more promptly that month. In addition, Jefferies also admitted that he had submitted applications using fictitious names and other information.

Dustin Kent Jefferies (Principal): Fined $10,000; Barred in Principal capacity only; Suspended 1 year in all capacities
Tags:  Signature    Life Insurance    Production Quota     |    In: Cases of Note : FINRA
Bill Singer's Comment
Seriously? Really? OMG, what was he thinking??
NAME REDACTED (Supervisor)
AWC/2008014144201/March 2011

REDACTED submitted requests to her member firm to make charitable sponsorship payments to a non-profit organization that she served as a vice president and a member of the board of directors, which was disclosed in writing to, and approved by, her firm. The firm approved REDACTEDís requests and made the sponsorship payments through checks.

The founder and executive director of the non-profit wrote checks totaling $20,275 to himself from the non-profitís account at REDACTEDís firm. REDACTED communicated with the founder about his personal use of the funds in a series of emails through her firm email account, which show that the founder used the funds for a move to a new place of residence, for rent and utilities and for cell phone bills, among other expenses; in one of his emails to REDACTED, the founder promised to pay the funds back.

In an email to the founder, REDACTED told him to use the money from the non-profitís account to help him get established at his new place of residence and that they would find a way to build the funds back up over time. Thereafter, REDACTED submitted the final request for a sponsorship payment of $5,000 to be made to the non-profit.

In addition, REDACTED was in possession of a checkbook belonging to the non-profit and, per the founderís oral authorization, REDACTED wrote checks and improperly signed the founderís name to those checks, but REDACTED did not have written authorization to sign the checks and did not place any notation on the checks indicating that she was signing the checks on the founderís behalf. The checks totaled approximately $7,723 and were made payable either to third parties or to ďcashĒ; of this total, approximately $3,415 was paid through checks written to ďcash,Ē thereby REDACTED improperly signed the name of an authorized signatory of a customer account on checks.

REDACTED failed to timely comply with a FINRA request that she provide testimony in connection with a FINRA investigation.

NAME REDACTED (Supervisor): Fined $10,000; Suspended 2 years
Tags:  Checks    Signature     |    In: Cases of Note : FINRA
Roger Craig Fulton (Principal)
AWC/2009018041101/March 2011

Fulton submitted a variable annuity application and other documents to his member firm knowing that they contained falsified customer signatures. Fulton recommended that a customer switch a variable annuity he owned for another variable annuity, which had advantageous riders. The customer agreed to the switch, but Fulton agreed to delay the switch until market conditions improved.

Fulton determined that market conditions were appropriate for the switch on a certain date, but the customer was out of town on an extended trip at that time. Fulton and the customer then agreed that the customerís relative would sign the customerís name to the variable annuity application and the other documents necessary to complete the switch transaction, which she did with Fultonís knowledge. Fulton then submitted the annuity application and other documents the relative falsely signed to his firm as authentic, knowing that the customerís signature on the documents was not authentic. In addition, Fultonís submission of the falsified application and other documents to his firm caused the firmís books and records to be inaccurate.

Roger Craig Fulton (Principal): No fine in light of financial status; Suspended 3 months
Tags:  Annuity    Variable Annuity    Signature     |    In: Cases of Note : FINRA
Bill Singer's Comment
I'm not going to defend the RR's conduct but, I'm sorry, this just does not warrant a 3-month suspension.  The key issue that distinguishes this fact pattern from so many other unauthorized signature case is that the client AUTHORIZED the affixation by the relative and the transaction.  Unquestionably, Fulton should have disclosed to his firm that the signature was not the client's original but one authorized in abstentia.  Nonetheless, this error in judgment warrants an admonition and not a formal regulatory sanction as far as I'm concerned. I'm confining that opinion to the very narrow set of facts in this case.
February 2011
Daniel Michael Doderer
AWC/2009020824101/February 2011
In connection with the opening of a new account for an existing institutional client, Doderer signed the names of officers for that client on sections of a Uniform Application for Investment Advisor Registration (Form ADV), without the signatoriesí authorization or consent, and added false dates to sections of the Form ADV. Doderer submitted the Form ADV in connection with the opening of another account for the client, his member firm rejected it because it lacked a manual signature. Rather than obtain the signatures from the institutional client, Doderer signed the name of the clientís vice president next to the electronic signature on the domestic investment adviser execution page and state registered investment adviser execution page on the Form ADV, and inserted a false execution date on the execution page. Doderer signed the name of the clientís president and inserted a false execution date on the non-resident investment adviser execution page of the Form ADV. Doderer signed the officersí names without their authorization or consent and submitted that Form ADV to the firm.
Daniel Michael Doderer: Fined $5,000; Suspended 1 month
Tags:  Form ADV        Signature     |    In: Cases of Note : FINRA
Dorval Knight McLaughlin Jr.(Principal)
AWC/2008016319801/February 2011

McLaughlin checked several boxes on an Explanation of Transaction form and placed the customerís initials next to the boxes, without the customerís knowledge or authority; the customer had signed the signature page related to her annuity purchase but did not initial pages that explained the transaction and fees involved. McLaughlin signed a customerís name to a Mutual Fund & Certificate Redemption Exchange and/or Transfer Form without the customerís knowledge or authority.McLaughlin signed a customerís name to a Transfer on Death Account Agreement/ Payment on Death Account Agreement without the customerís knowledge or authority.

McLaughlin failed to respond completely to FINRA requests for information. (FINRA Case #)

Dorval Knight McLaughlin Jr.(Principal): Barred
Tags:  Signature     |    In: Cases of Note : FINRA
Joshua A. Ellis
AWC/2009016923602/February 2011
Ellis signed customersí applications for fixed annuities, as a favor to another registered representative not authorized to sell products a company offered, without having met with or discussed the fixed annuity product or the points on each application with the customers, or ascertained the productís suitability for each customer as required; thereby his attestations on the annuity applications submitted to his member firm and the insurer were false. The falsified applications were submitted to the firm under Ellisí production number, and the insurer approved the applications and issued annuity contracts based on Ellisí misrepresentations on the applications. After the falsified annuity applications were discovered, Ellisí firm offered to rescind the transactions for the customers or choose another investment at no cost. Neither Ellis nor the other representative received any compensation for the transactions.
Joshua A. Ellis: Censured; Fined $7,500; Suspended 6 months
Tags:  Signature    Annuities     |    In: Cases of Note : FINRA
Timothy Robert Mays
AWC/2009020791701/February 2011

Mays falsified firm records pertaining to client accounts.When customers omitted to sign documents necessary to effect authorized changes or actions with respect to their accounts, Mays placed the customersí signatures on the documents himself, rather than returning the documents to the customers to sign. In each instance, the customer wanted and authorized the activity resulting from the submission of the falsified documents. While Mays was associated with another member firm, the firm learned from a customer that she had not signed a document purporting to bear her signature, and Mays initially told the firm that his falsification was limited to that one instance involving one client.

 It was not until his firmís inspection of Maysí office that he admitted to the firm that he had placed other customersí signatures on documents when necessary to accomplish their objectives.

Mays misled his firm by delaying this admission about the extent of his past misconduct while registered through the first firm.

Timothy Robert Mays: Fined $5,000; Suspended 8 months
Tags:  Signature     |    In: Cases of Note : FINRA
Bill Singer's Comment
Frankly, not much to disagree with here. A common enough violation that was exacerbated by a cover-up.  All in all, the punishment fits the violation.
January 2011
George Abbott Berry
AWC/2009017596901/January 2011

Berry serviced a brokerage account a relative held but did not have power of attorney or discretionary authorization over the account. Berry failed to report his relativeís death to his member firm, and after leaving the firm, he removed funds from the account totaling $70,000 by requesting checks be drawn on the account, sent to her listed address, which was the same as Berryís home CRD address, and deposited the checks in a joint checking account he shared with his relative. When Berry submitted a written withdrawal request to the firm for $10,000, the firm discovered that the signature did not match the signature on file for the customer and froze the brokerage account after Berry acknowledged his relativeís death with the firmís customer relations staff.

The Firm amended Berryís Form U5 to reflect an internal review of his withdrawals and his failure to advise the firm of his relativeís death.

George Abbott Berry: Barred
Tags:  Checks    Deceased    Power Of Attorney    Signature     |    In: Cases of Note : FINRA
Bill Singer's Comment
The somewhat puzzling aspect of this case is whether there was a joint account at the brokerage firm -- since we are told that the bank account was joint.  If there was a Joint-Tenants-With-Right-of-Survivorship brokerage account, then you have to wonder why Berry went through all of the subterfuge; which sort of suggests that there wasn't a JTWROS in place for the brokerage account.
Novin Ghaffari Nikou
OS/2008015095101/January 2011
Nikou falsified a customerís signature and initials on forms her member firm used related to the purchase of a fixed annuity. Nikou violated the firmís policy that prohibits its registered representatives from signing customer names or initials, even if done with the clientís knowledge and/or consent.
Novin Ghaffari Nikou : No fine in light of financial status; Suspended 30 days
Tags:  Signature     |    In: Cases of Note : FINRA
Bill Singer's Comment
Please note: "even if done with the clientís knowledge and/or consent"
Stephen Richard Ventura
AWC/2009018522001/January 2011
Ventura acquired customersí signatures by having them sign a paper life insurance application, and that after receiving the paper executed life insurance applications, he placed the applications onto an electronic pad and physically traced the customersí signatures from the paper life insurance policies to the electronic pad in order to process their life insurance policies, without any of the affected customersí knowledge or consent .
Stephen Richard Ventura: Fined $10,000; Suspended 6 months
Tags:  Signature     |    In: Cases of Note : FINRA
Bill Singer's Comment
Tracing onto an electronic pad!  Now there's someone who shows ingenuity.  Once upon a time you had to hold the paperwork up to a window.
Enforcement Actions
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