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.

Brandon Michael Kappes
AWC/2010022662401/December 2010

Associated Person Kappes created fictitious homeowners-, automobile- and renters-insurance policies in order to meet production goals with his member firm’s affiliated insurance company. Kappes did so by forging customer signatures or otherwise falsifying insurance application forms and related documents. The firm’s affiliated insurance company paid Kappes approximately $18,000 in commissions as a result of the fictitious policies.

Brandon Michael Kappes : Barred

Tags:  Forgery    Insurance    production quota     |    In: Cases of Note : FINRA

Fox Financial Management Corporation and James Edward Rooney Jr. (Principal)
OS/2008011592201/December 2010

Acting through Rooney, Fox Financial

• sold zero-coupon bonds to customers and negligently omitted material facts concerning the fund’s manager, who the State of Texas had charged with forgery of a financial instrument, and was sentenced to five years deferred adjudication and had been the subject of a Temporary Order of Prohibition for selling unregistered securities by the State of Illinois;
• sold zero-coupon bonds to customers that were secured by interests in life insurance policies, and limited liability companies, which Rooney controlled and were affiliated with the firm, issued the bonds, and negligently omitted material facts to customers relevant to the criminal records of the bonds’ manager and owning companies.
• participated in private placement offerings of zero-coupon bonds limited liability companies issued, and each of the offerings claimed an exemption from registration under the Securities Act of 1933; however, the offerings were not separate and distinct, and were, therefore, subject to integration, and to the securities registration requirements of public offerings.
• sold zero-coupon bonds, failed to establish a proper escrow account by using a limited liability company not chartered as a bank as the escrow agent, and falsely represented that customer funds would not be commingled.

Rooney failed to detect that customer funds had been commingled because he had neglected to obtain copies of the escrow account statements and to maintain such statements among the firm’s records.

The firm’s test of its system of supervisory controls was flawed because it failed to include a review of its private placement business, and Rooney stated in his annual certification of compliance that the firm had established and maintained policies and procedures reasonably designed to ensure compliance with FINRA rules. In addition,the firm failed to evidence its supervision over Rooney, in that Rooney was the only principal who had signed Subscription Agreements indicating approval of the customer’s investment in an offering.

Fox Financial Management Corporation: Censured; Fined $40,000

James Edward Rooney Jr. (Principal): Fined $20,000; Suspended 15 business days in Principal capacity only

Tags:  escrow    zero coupon    private placement    forgery         |    In: Cases of Note : FINRA

William Hanson Hauser
AWC/2010022661001/December 2010

Associated Person Hauser created fictitious homeowners insurance policies in order to meet production goals with his member firm’s affiliated insurance company. Hauser did so by forging customer signatures or otherwise falsifying insurance application forms and related documents. The firm’s affiliated insurance company paid Hauser approximately $4,000 in commissions as a result of the fictitious policies.

William Hanson Hauser : Barred

Tags:  Forgery    Insurance    production quota     |    In: Cases of Note : FINRA

Geraldine Ann Wert (Principal)
OS/2008015086401/November 2010

Wert converted approximately $18,610 from an expense account her supervisors’ owned to pay for personal expenses. Wert took approximately $12,000 in unauthorized personal loans from the expense account, which she repaid shortly after withdrawing the funds. She forged her supervisors’ signatures on customers’ new account forms and advisory agreements without her supervisors’ authorization or knowledge. Wert failed to appear and provide testimony as FINRA required.

Geraldine Ann Wert (Principal): Barred

Tags:  Conversion    Expenses    Forgery     |    In: Cases of Note : FINRA

David Alan Kossak
AWC/2008014690901/October 2010

While registered with a member firm, Kossak directed his assistant to sign a customer’s name to a document related to a fixed insurance contract without the customer’s knowledge or authorization. Kossak had sold the fixed insurance contract to the customer while at a previous member firm and the customer was not a customer of his present firm. The assistant, acting at Kossak’s direction, forged and notarized required signatures on the document, which Kossak subsequently submitted as authentic. The customer complained of fraud and forgery to the insurance company, which notified Kossak of the complaint, but he failed to update his Form U4 within 30 days of learning of the complaint.

David Alan Kossak : Fined $15,000; Suspended 1 year

Tags:  Insurance    Forgery     |    In: Cases of Note : FINRA

William Ray Collins Jr
AWC/2008013648001/September 2010

Collins forged customers’ 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 customers’ behalf, forged the customers’ 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

Susan Magourik
2008014644201/August 2010

Associated Person Magouirk caused checks totaling $65,000 to be drawn on a customer’s account without the customer’s permission or authority, and used them for her own benefit. Magouirk forged the customer’s signature on Letters of Authorization to obtain the $65,000 that she converted from the customer’s account.

Susan Magourik : Barred

Tags:  Forgery    Check     |    In: Cases of Note : FINRA

Andres Barcenas Jr.
AWC/2008014940401)/July 2010

Barcenas forged customers’ signatures without their authorization and affixed photocopied signatures on paperwork for customers. Barcenas’ conduct caused his member firm’s records to be inaccurate.

Andres Barcenas Jr. : Fined $5,000; Suspended 3 months

Tags:  Forgery     |    In: Cases of Note : FINRA

Blaine Carter Davis
AWC/2009016750801/July 2010

Davis converted $69,200 of customers’ funds from his member firm’s active assets accounts for his personal use. Davis wrote checks made payable to the order of “cash,” enabling him to withdraw funds from customers’ active assets accounts, and then deposited the withdrawn funds into his personal bank account. Davis forged the customers’ signatures on the checks before negotiating them.

Blaine Carter Davis: Barred

Tags:  Check    Forgery    Banks     |    In: Cases of Note : FINRA

Marvin J. Tick
AWC/2008015322101/June 2010

Tick  forged customer signatures on insurance forms and maintained a blank medical history questionnaire in a customer file that a customer had pre-signed, in violation of his member firm’s policies. Instead of having a customer complete and sign a correct application form after the customer had completed and signed the wrong form, Tick “cut and pasted” the customer’s signature to the correct application form. Tick forged customers’ signatures on policy delivery acknowledgment forms and a “not taken” form.

Marvin J. Tick : Fined $5,000; Suspended 60 days

Tags:  Forgery         |    In: Cases of Note : FINRA

Andrew Mark Ruby
AWC/2009017832001/May 2010

From about February 2005 through March 2009, Ruby stole blank personal checks and stock certificates from customers and forged their signatures. Ruby filled in the blank checks, inserting dollar amounts that totaled approximately $128,275, forged the customers’ signatures and then deposited the checks into an account under his control. Ruby sold the stock certificates and kept the proceeds. Ruby used the funds from the checks and stock certificates for personal expenses.

Andrew Mark Ruby: Barred

Tags:  Check    Forgery     |    In: Cases of Note : FINRA

Victor Craig Campbell (Principal)
AWC/2009019015201/April 2010

Campbell created fictitious life insurance policies and forged clients’ signatures on the applications for the policies. Campbell created the false policies to help qualify for an annual insurance sales conference and subsequently canceled the policies.

Victor Craig Campbell (Principal): Barred

Tags:  Forgery     |    In: Cases of Note : FINRA

Jeffrey Allen Davis
OS/2008015704401/March 2010

Davis failed to obtain a customer’s signature on an investment account application form; instead of contacting the customer, Davis falsified the customer’s signature on the application and submitted it to his member firm as authentic, causing the firm’s books and records to be false and inaccurate. The customer filed a complaint with the firm concerning the fees charged in his managed account and the firm responded denying that any compensation was due to the customer. Davis acknowledged to the customer that he had falsified his signature on the application, and reimbursed the customer $7,772.31 for losses in his account without disclosing such payments to his firm. Davis failed to appear and testify as FINRA requested.

Jeffrey Allen Davis : Barred

Tags:  Forgery     |    In: Cases of Note : FINRA

Melissa Dawn Curry
AWC/2009017865401/March 2010

Associated Person Curry misappropriated $42,600 from a registered representative of her member firm. Curry took checks from the desk of another employee, who maintained the registered representative’s checks, placed her name on the checks as payee, filled in amounts ranging from $200 to $3,500, forged the registered representative’s signature, and deposited the checks into her personal bank account.

Melissa Dawn Curry: Barred

Tags:  Check    Forgery     |    In: Cases of Note : FINRA

David Steven Forman
OS/2007007989901/February 2010

Forman participated in the sale of a $5 million life insurance policy to a trust and took control of the policy. Forman informed the trustee that the trust might obtain more money by selling the policy than by redeeming it for its cash value after notification was received that the policy would lapse for failure to pay premiums. Forman participated in sending premium payments to avoid a lapse in the policy without the trustee’s knowledge or consent, facilitated the sale of the policy with forged and falsified documents, and retained the entire amount of the sale proceeds, approximately $942,000, for himself and another individual. No portion of the sale proceeds was paid to the customers or the trust.

David Steven Forman: Barred

Tags:  Forgery    Policy Lapse     |    In: Cases of Note : FINRA

Carlos Daniel Rivera
2007010600101/January 2010

Rivera failed to disclose to his member firm an outside brokerage account that he opened after his firm expressly told him that he could not maintain outside brokerage accounts that he opened prior to his employment with the firm . Rivera forged a letter that purported to be from an employee of his firm, instructing the firm where he maintained an outside brokerage account to lift trading restrictions on his newly opened, undisclosed account.

Carlos Daniel Rivera: Barred

Tags:  Outside Accounts    Forgery     |    In: Cases of Note : FINRA

Justin C. Sidaway
2008013305801/January 2010

Sidaway accessed the systems of a bank affiliate of his member firm to obtain information regarding a customer and his retail bank account and, without the customer’s knowledge or authorization, used the customer’s personal account information to forge the customer’s signature and complete withdrawals totaling $11,500 for his personal use, thereby converting the funds. Sidaway failed to respond to FINRA requests for information.

Justin C. Sidaway: Barred

Tags:  Forgery     |    In: Cases of Note : FINRA

Michael Lewis Axel
AWC/2007011308801/January 2010

Axel misappropriated at least $624,000 from customers of his member firm. Without the customers’ knowledge, authorization or consent, Axel initiated the issuance of checks from the customers’ accounts, obtaining the checks ostensibly so that he could deliver them to the customers, and then forged the customers’ signatures and cashed the checks or deposited the checks into his personal bank account. Axel effected unauthorized transactions in customers’ accounts without their knowledge, authorization or consent. He failed to appear for a FINRA on-the-record interview.

Michael Lewis Axel: Barred

Tags:  Check    Forgery     |    In: Cases of Note : FINRA

Rene Francisco Palacios
2007011375301/January 2010

Palacios misused $62,750 in customer’s funds by opening a new bank account in a customer’s name, funding the new account with a deposit of $62,750 from the customer’s brokerage account maintained at Palacios’member firm , and forging the customer’s signature on new account documents and checks drawn from the fraudulent account. Palacios admitted to his firm that he misused the customer’s funds and forged the customer’s signature. Palacios failed to appear for FINRA on-the-record interviews.

Rene Francisco Palacios: Barred

Tags:  Forgery     |    In: Cases of Note : FINRA

Stuart David Baron
AWC/2008012408101/January 2010

Baron converted approximately $8,530 from a relative. Baron forged the relative’s name on documents without her knowledge, permission or authorization in order to open a joint checking account and then signed her name on transfer forms without the relative’s permission or authorization and transferred approximately $8,530 from her Individual Retirement Account (IRA) to the joint account, using the funds for his personal use.

Stuart David Baron: Barred

Tags:  Forgery     |    In: Cases of Note : FINRA

Thailia Alisa Tucker
AWC/2007011330602/January 2010

Registered Principal Tucker misappropriated approximately $847,188.87 from customers’ accounts at her member firm and used the funds for her own use and benefit. To facilitate her improper use and misappropriation of customer funds, Tucker

• caused international customers’ accounts to be removed from an abandoned status,
• caused the addresses for the accounts to be changed to addresses that she controlled,
• effected unauthorized sales of securities in the customers’ accounts,
• forged Letters of Authorization (LOAs) and Wire Transfer Agreements (WTAs) to transfer funds out of the customers’ accounts, and
• approved and processed the fraudulent LOAs andWTAs.

Tucker’s conduct caused her firm to maintain inaccurate books and records. To make cash available, Tucker sold securities in several accounts without the customers’ knowledge or authorization, then transferred the proceeds to herself through relatives by wire or check. Tucker failed to respond to FINRA requests for information and failed to appear for an on-the-record interview.

Thailia Alisa Tucker: Barred

Tags:  Abandoned Accounts    Forgery     |    In: Cases of Note : FINRA