A Registered Rep from San Diego, CA, and another individual were trainees in a member firm’s professional development program and formed a partnership through which they jointly solicited and handled customer accounts as well as splitting any production credits that either generated.  As part of their ill-fated efforts, they created a model fund portfolio ...

FINRA found that, as part of their efforts to attract clients, RR Miller and the individual (the "Partners") created a spreadsheet that set a model fund portfolio that they either presented to potential customers during meetings or sent by email or mail to prospective customers.  The version included a mix of conservative and risky securities, along with a chart of history of returns the individual securities, and overall portfolio earned.

    Alleged Missteps By RR Miller and/or His 'Partner'.   The partners allegedly made the following errors: 

• In some communications with potential customers, they misrepresented that this was a portfolio that they managed and that the stated returns were their returns.  

• Neither one sought or received a firm supervisor’s prior approval for the use of the model fund portfolio or permission of its dissemination.

• The model portfolio’s spreadsheet was not filed with FINRA’s Advertising Regulation Department, as required, within 10 business days after first dissemination of the material as required.

• The model fund portfolios didn't include any information re: risks associated with the funds.

• The chart didn't include a sound basis for the performance evaluation for each of the securities included in the portfolio.
  

• The model portfolio failed to identify or to display in a prominent fashion the representatives's association with their firm.  

• RR Miller had his assistant type up a stop transfer letter and he forged the customer’s signature on the letter meant to prevent the customer from transferring his account to another firm.  Later, when RR Miller admitted to his branch manager that he had forged the stop transfer request, the firm immediately terminated Miller’s employment.  

RR Miller accepted a $10K fine and one-year suspension to settle FINRA charges.  This is FINRA Case #2009018219101.   [FINRA March Disciplinary Actions]