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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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 #)
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.
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.
- Accredited Investor
- Affirmative Determination
- Annual Compliance Certification
- Annual Compliance Meeting
- Away Accounts
- Best Efforts Offering
- Blank Forms
- Campaign Contributions
- Check Kiting
- Clearing Agreement
- Confidential Customer Information
- Contingency Offering
- Continuing Education
- Corporate Credit Card
- Credit Cards
- Customer Protection Rule
- Debit Card
- Do Not Call
- Due Diligence
- Electronic Communications
- Electronic Storage
- False Statements
- Finder Fees
- Foreign Language
- Form ADV
- Guaranteeing Against Losses
- Hedge Fund
- Heightened Supervision
- Insider Trading
- Installment Plan Contracts
- Instant Messaging
- Investment Advisor
- Joint Account
- Life Insurance
- Mark-Up Mark-Down
- Material Change Of Business
- Membership Agreement
- Minimum Contingency
- Money Laundering
- Mutual Funds
- Net Capital
- Outside Accounts
- Outside Business Activities
- Power Of Attorney
- Private Placement
- Private Securities Transaction
- Producing Manager
- Production Quota
- Promissory Notes
- Proprietary Traders
- Public Appearances
- Referral Fees
- Reg D
- Reg U
- Regulation 60
- Regulation S-P
- Reverse Mortgage
- Rule 8210
- Sharing Profits
- Statutory Disqualification
- Stock To Cash
- Supervisory System
- Suspense Account
- Third Party Vendor
- Time And Price Discretion
- Trading Limits
- Trading Volume
- Trust Account
- U.S. Treasuries
- Unauthorized Transaction
- Universal Lease Programs
- Unregistered Person
- Unregistered Principal
- Unregistered RRs
- Unregistered Securities
- Unregistered Supervisor
- Variable Annuity
- Variable Insurance