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- Sarah ten Siethoff is New Associate Director of SEC Investment Management Rulemaking Office
- Catherine Keating Appointed CEO of BNY Mellon Wealth Management
- Credit Suisse to Pay $47Mn to Resolve DOJ Asia Probe
- SEC Chair Clayton Goes 'Hat in Hand' Before Congress on 2019 Budget Request
- SEC's Opening Remarks to the Elder Justice Coordinating Council
- Massachusetts Jury Convicts CA Attorney of Securities Fraud
- Deutsche Bank Says 3 Senior Investment Bankers to Leave Firm
- World’s Biggest Hedge Fund Reportedly ‘Bearish On Financial Assets’
- SEC Fines Constant Contact, Popular Email Marketer, for Overstating Subscriber Numbers
- SocGen Agrees to Pay $1.3 Billion to End Libya, Libor Probes
- Cryptocurrency Exchange Bitfinex Briefly Halts Trading After Cyber Attack
- SEC Names Valerie Szczepanik Senior Advisor for Digital Assets and Innovation
- SEC Modernizes Delivery of Fund Reports, Seeks Public Feedback on Improving Fund Disclosure
- NYSE Says SEC Plan to Limit Exchange Rebates Would Hurt Investors
- Deutsche Bank faces another challenge with Fed stress test
- Former JPMorgan Broker Files racial discrimination suit against company
- $3.3Mn Winning Bid for Lunch with Warren Buffett
- Julie Erhardt is SEC's New Acting Chief Risk Officer
- Chyhe Becker is SEC's New Acting Chief Economist, Acting Director of Economic and Risk Analysis Division
- Getting a Handle on Virtual Currencies - FINRA
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NEWSLETTERS & ALERTS
Altered States – FINRA Sanctions
[Photo: William Hurt & Blair Brown in the 1980 movie, "Altered States"]
by Howard Haykin
FINRA commonly issued sanctions against registered individuals – usually brokers – for altering customer documents. For June, FINRA reported 7 such cases. For example, brokers add or change information on customer account documents, or they use signatures from previously submitted documents.
It’s impossible to know how prevalent the practice is – but it’s got to be frequent. That may be why FINRA tends to come down hard on the 'offenders' who get caught. The fines may typically be small ($5K), but the accompanying suspension can extend beyond one year. See below the 7 cases cited this month by FINRA.
FINANCIALISH TAKE AWAY. Broker-dealers might consider using the below listed cases - along with others - in their CEP sessions for brokers. Nothing like emphasizing the downside of altering firm documents. No matter ‘how you slice it’, it’s bad business.
These cases appeared in FINRA Disciplinary Actions for June 2017.
- Adriane L. Cagle was assessed a deferred fine of $5,000 and suspended from association with any FINRA member in all capacities for two months … to settle FINRA charges that she altered several documents that had already been signed by customers and signed as a witness to customer signatures on certain documents without having actually witnessed the customers sign them. (FINRA AWC #2016051146801)
- Matthew Ernest Garbarino was fined $5,000 and suspended from association with any FINRA member in all capacities for four months … to settle FINRA charges that he obtained from customers of his member firm executed, but partially blank, signature pages from change-of-broker forms issued by several annuity companies. He later copied the signature pages and created new change-of-broker forms by filling in numerous annuity contract numbers on the blank portions of the pages containing the photocopied signatures. (FINRA AWC #2014043695701)
- John Edward Olinghouse was assessed a deferred fine of $15,000 and suspended from association with any FINRA member in all capacities for one year … to settle FINRA charges that he altered customer documents he then submitted to his member firm, which caused the firm to have inaccurate books and records. (FINRA AWC #2015045276901)
- Eric Eugene Ott was assessed a deferred fine of $15,000 and suspended from association with any FINRA member in all capacities for 13 months … to settle FINRA charges that he signed a customer’s name to two insurance applications without the customer’s knowledge or consent [along with charges of unreported outside business activities]. (FINRA AWC #2016049496201)
- Eric Stanley Springer was fined $5,000 and suspended from association with any FINRA member in all capacities for one month … to settle FINRA charges that he photocopied customers’ signatures from documents already on file with his member firm, and affixed the photocopied customer signatures onto the signature pages of various forms required to be completed …. (FINRA AWC #2013038505301)
- Robert William Ward was assessed a deferred fine of $7,500 and suspended from association with any FINRA member in all capacities for nine months … to settle FINRA charges that he engaged, and permitted other firm employees in his office to engage, in a practice of obtaining customer signatures on blank or incomplete forms and photocopying customer signatures from previously signed documents [along with charges of failing to update his U4 for tax liens]. (FINRA AWC #2015045555901)
- George Marshall Warner was fined $5,000 and suspended from association with any FINRA member in all capacities for 30 days … to settle FINRA charges that he altered various customer documents on at least five occasions after the customers had already signed them. (FINRA AWC #2014043727001)