Enforcement Actions
Financial Industry Regulatory Authority (FINRA)
CASES OF NOTE
2010
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 2010
David Michael Pagliarulo
AWC/2009017267701/December 2010
Pagliarulo signed customersí names on a variety of internal and external documents related to their accounts that he serviced. Pagliarulo also copied, cut and pasted another customerís name on the firmís explanation of transaction form. All of the customers authorized Pagliaruloís action in each instance, but only one of the customers authorized him to sign their name on the respective documents. Pagliarulo knew that the firm did not permit employees to sign customersí names on documentation related to their accounts.
David Michael Pagliarulo : Fined $10,000; Suspended 2 years
Tags:  Signature     |    In: Cases of Note : FINRA
Bill Singer's Comment
I have often chastized RRs for the unauthorized affixing of customers' signatures to various documents -- so my bona fides on this issue are well established.  However, c'mom, am I missing something here? Two years suspension when the customers largely authorized the conduct (if not the actual signing). Again, I recognize the VERY legitimate concerns about this type of violation.  However, if a situation where customers confirmed their intention and desire to accomplish the ends ensued, I don't see why several months suspension would not have been just as appropriate sanction.
Kyle T. Nolen
AWC/2009020798901/December 2010
Nolen copied customersí original signatures from signed insurance documents that the customers had emailed him onto hard copies of the documents, without the customersí knowledge or authorization. Nolen was attempting to produce what appeared to be original customer signatures on the documents, since the insurance company would not accept scanned or electronically transmitted documents. Nolen submitted the falsified signatures to the insurance company, representing them to be authentic.
Kyle T. Nolen : Fined $5,000; Suspended 3 months
Tags:  Signature     |    In: Cases of Note : FINRA
Bill Singer's Comment
As always, I get it and fully appreciate FINRA's and the Firm's concerns. Nonetheless, in this case, 3 months seems a bit excessive.
Robert John Postma
AWC/2009019449201/December 2010
Postma signed another registered representativeís name to an investment application and agreement and an investor profile questionnaire and disclosures that a customer had signed to open an account because the representative was not in the office. Postma submitted the documents to his member firmís affiliate without the representativeís knowledge or consent.
Robert John Postma : Fined $5,000; Suspended 1 month
Tags:  Signature     |    In: Cases of Note : FINRA
November 2010
Mandar Vijay Raut
AWC/2009017957801/November 2010
Raut completed and affixed a customerís signature to a distribution request form to transfer the customerís funds from his joint brokerage account into his brokerage Individual Retirement account (IRA), without the customerís knowledge or authorization.
Mandar Vijay Raut : Fined $5,000; Suspended 2 months
Tags:  Signature     |    In: Cases of Note : FINRA
Vincent Fedders
AWC/2009018330701/November 2010
Fedders signed the names of registered representatives and supervisors of his member firm on internal administrative documents without their knowledge or authorization. although he knew the firm did not permit employees to sign other employeesí names on internal administrative documents.
Vincent Fedders: Fined $5,000; Suspended 6 months
Tags:  Signature     |    In: Cases of Note : FINRA
September 2010
John Leisen Kreuz (Principal)
AWC/2010021630301/September 2010
Kreuz signed customersí signatures on various forms to transfer their accounts from his previous member firm to another member firm, and submitted them to his firm without the customersí approval or knowledge. Many of his customers agreed to transfer their accounts to his new member firm, but when Kreuz learned that he needed to submit the forms by a certain date, or his previous firm would be entitled to keep the trailing fees for mutual funds he had previously purchased for his customers, he completed and signed the forms.
John Leisen Kreuz (Principal): Fined $5,000; Suspended 1 year
Tags:  Signature    Mutual Funds     |    In: Cases of Note : FINRA
Mike Robert Kilpatrick (Principal)
AWC/2007010828201/September 2010
Kilpatrick signed his member firmís customersí names to various documents when the firmís procedures prohibited him from signing customersí names on the documents regardless of whether the customers had authorized Kilpatrick to sign their names. Kilpatrick failed to amend his Form U4 to disclose a material fact.
Mike Robert Kilpatrick (Principal): Fined $7,500; Suspended 6 months
Tags:  Signature     |    In: Cases of Note : FINRA
Patrick Soungook Kim
AWC/2009018171101/September 2010

Kim falsified certain account-related paperwork that had been previously signed by the customer; Kim altered the forms by changing the commission rate indicated from 1.1 percent to 1.4 percent and/or by changing the date next to the customerís signature. Kim made these changes without the customerís knowledge, authorization or consent and submitted the forms to his employer member firm.

Kim submitted a false and incomplete written statement to a FINRA request for information.

Patrick Soungook Kim : Barred
Tags:  Signature         |    In: Cases of Note : FINRA
William Ray Collins Jr
AWC/2008013648001/September 2010

Collins forged customersí signatures on financial documents and submitted the documents to his member firm and failed to send a copy to the customers.

Collins failed to disclose a variable annuity service fee in his discussion with customers and, when the customers inquired about the fee, Collins told them that the fee was an error; and to avoid further inquiries he used his own funds to pay the fee without informing the firm or the customers. Collins accomplished his payment of the fees when he executed money orders on the customersí behalf, forged the customersí signatures on the money orders and submitted the money orders to the firm to pay the variable annuity fees that he had not disclosed to the customers.

William Ray Collins Jr: Barred
Tags:  Signature        Forgery    Variable Annuity    Guaranteeing Against Losses         |    In: Cases of Note : FINRA
August 2010
Chapin Miller
AWC/2009016664401/August 2010
Miller falsified customersí signatures on account-related documents without their authorization, and submitted them to his member firm, thereby causing his firmís books and records to be inaccurate.
Chapin Miller : Fined $5,000; Suspended 3 months
Tags:  Signature     |    In: Cases of Note : FINRA
Daniel Lee Widmer
AWC/2009016698302/August 2010
Widmer altered firm variable annuity subaccount transfer selection forms by whiting-out dates on signature pages, handwriting a new date, and then attaching the pages that contained the altered dates. The firm discovered blank documents containing customer signatures in Widmerís office files. Although the customers requested the transactions that were initiated by the altered forms, Widmerís member firm strictly prohibited altering documents in any manner.
Daniel Lee Widmer: Fined $5,000; Suspended 3 months
Tags:  Signature     |    In: Cases of Note : FINRA
Bill Singer's Comment
Yet another white-out case.  How low tech.
Erik Carl Peterson (Principal)
AWC/2008014435301/August 2010
Peterson altered and falsified firm records pertaining to customer accounts and made changes to documents with white-out fluid after the customer had signed the forms. In other instances, clients signed blank transaction-related forms that Peterson later completed. Peterson affixed a customerís signature to Change of Dealer Forms with the customerís permission.
Erik Carl Peterson (Principal): Fined $5,000; Suspended 2 months
Tags:  Signature     |    In: Cases of Note : FINRA
Bill Singer's Comment
Oh my, how very high-tech!  White-out.
Marissa Miranda McDermott (Supervisor)
AWC/2009017349601/August 2010
McDermott falsified customersí signatures on her member firmís internal documents, which are required to be completed when a foreign customer uses a U.S. mailing address, without the customersí knowledge or authorization.
Marissa Miranda McDermott (Supervisor): Fined $5,000; Suspended 1 month
Tags:  Signature     |    In: Cases of Note : FINRA
Mark Andrew Jamgochian
AWC/2009018304601/August 2010
Jamgochian cut-and-pasted customersí signatures on account-related documents without the customersí authorization or consent. The documents were all variable annuity applications for transactions that the customers previously authorized.
Mark Andrew Jamgochian : Fiend $5,000; Suspended 3 months
Tags:  Signature    Variable Annuity     |    In: Cases of Note : FINRA
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