Enforcement Actions
Financial Industry Regulatory Authority (FINRA)
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 2009
Brian John Fest and Traci Ann Thomason
AWC/2005002244303 and 2005002244302/December 2009
Fest and Thomason did not provide customers with complete written disclosure of material terms of transactions before they entered into them, including surrender charges paid, sales charges incurred on new investments and optional riders selected on annuities.

Festís and Thomasonís member firm required that registered representatives obtain a customerís signature on transaction documents after they were completed to evidence that the customer was aware of the disclosures in those documents. Fest had clients sign blank transaction documents, which he had Thomason complete later with inaccurate information, including inaccurate sales charges and incorrect rationale for transactions,and submitted the documents to his firm without the clientsí review.

Fest provided inaccurate and misleading information to FINRA staff during on-the-record testimony and attempted to persuade Thomason to corroborate his inaccurate testimony. Festís pattern of recommending short-term unit investment trust trading in his customerís accounts was unsuitable
Brian John Fest and Traci Ann Thomason: Barred
Tags:  Surrender Charges    UIT     |    In: Cases of Note : FINRA
November 2009
Kimberly Sue Rutherford
AWC/2008012477401/November 2009

In connection with the sale of an annuity contract, Rutherford misrepresented to a customer that he would receive a higher return rate than what the terms of the policy offered. Rutherford provided the customer with falsified annual account statements and an altered annuity contract that reflected a higher return rate, when in fact the customer was receiving a lower rate of return. Rutherford falsified an annual account statement by increasing the account balance by over $5,000 in order to mislead the customer into believing that he received additional earnings as a result of the higher rate of return, and deposited over $5,000 of her own personal funds into the customerís account to compensate him for the disparity in return rates.

After agreeing to reimburse another customer for any early withdrawal penalties in connection with transferring money to his annuity, Rutherford falsified an annuity confirmation statement wherein the account balance was increased to cover a surrender charge that had not been credited after the customer complained that he was charged a penalty for early withdrawal.

Kimberly Sue Rutherford: Barred
Tags:  Annuity    Surrender Charge     |    In: Cases of Note : FINRA
Enforcement Actions