FINRA Lawyer Blog
This week’s FINRA settlements report AWC’s in which FINRA hit two FAs for some misguided efforts toward good customer service.
In the Matter of Sandra Gose Stevens, FINRA Matter No. 2018058123701
Stevens was formerly registered with MML Investors Services, LLC, which terminated her in April 2018 concerning an alleged “signature irregularity.” FINRA thereafter initiated an investigation and made the following findings in the AWC:
“[A]s an accommodation to her customers, Stevens falsified documents, including IRA Distribution Forms, IRA Designation of Beneficiary Forms, and Variable Annuity Replacement or Insurance Change Forms, by copying, cutting, and then pasting customers’ signatures on documents. Stevens also had customers sign documents required to open accounts or effect variable annuity or insurance transactions in blank, so that Stevens could complete them at a later time.”
FINRA deemed the action of “cutting & pasting” a signature to be a Rule 2010 violation “even if done without fraudulent intent and ostensibly to assist a customer.” FINRA likewise found a Rule 2010 violation for maintaining blank signed forms, even if the purpose was “to accommodate possible future requests to open accounts or effect [future] variable annuity or insurance transactions …”
As a result of the violations, Stevens consents to a three-month suspension and a $5,000 fine.
In the Matter of James Lee, FINRA Matter No. 2019064508201
Lee was formerly registered with Pruco Securities LLC, which terminated his registration in October 2019. According to Pruco, Lee “impersonated two Prudential clients to obtain information regarding their accounts; one client verbally authorized his action.” Pruco’s Form U5 also suggested an unauthorized transaction but FINRA made no findings with regard to that allegation.
According to FINRAs AWC, with the customer’s permission: “Lee impersonated a customer on three telephone calls to an insurance company affiliated with the Firm. During these calls, Lee obtained information about how the customer could repay a loan that the customer had taken from his retirement account and Lee discussed a potential rollover from the customer’s retirement account.” Additionally, “Lee also impersonated a second customer on three telephone calls to the insurance affiliate. During these calls, Lee obtained information about the customer’s ability to withdraw funds from a retirement account. Lee also requested that the insurance affiliate cancel a rollover check that the customer previously requested, but which had not yet arrived in the mail, and reissue the check on an expedited basis. Although the customer gave Lee permission to request the cancellation and reissuance of the check, the customer did not authorize Lee to impersonate him.”
FINRA found Lee’s impersonations to have violated Rule 2010 and imposed a suspension of 15 business days and a $5,000 fine.
Herskovits PLLC has a nationwide practice defending individuals and companies subject to FINRA investigations and disciplinary proceedings. Feel free to call us at 212-897-5410 for a confidential consultation.