Purshe Kaplan Sterling Investments of Albany, NY, was sanctioned for having ineffectual policies and procedures in sales and operations  areas - sales of variable annuities;  transmittals of customer funds.  

First, FINRA charged the firm with failing to adequately supervise variable annuity ("V/A") transactions.  Among other things, the firm:

• failed to review such transactions on a timely basis;
• failed to provide adequate guidance to supervisors for them to review the suitability of V/A exchanges and the subaccount and rider recommendations associated with V/A sales;
• failed to implement reasonable means for identifying suspicious patterns involving V/A exchanges, such as exception reports. 

Second, the firm failed to establish, maintain and enforce adequate written supervisory control pols and procedures to review and monitor transmittal of customer funds.  Deficiencies included:

• failure to provide a means or method for documenting customer confirmation, notification or follow-up with respect to certain customer check requests; 
• failure to provide procedures to address whether an RR may deliver a check to a client.

        Failure to Require Documentation on Check Requests.   In addition the above two transmittal deficiencies, the firm failed to require that RR's present proof of customer approval for any check request below $25,000 - e.g., an LOA signed by customer, or a copy of the customer's driver’s license.  

As a result, an RR who no longer was with the firm, was able to misappropriate $41,300 from a customer's account by submitting separate check request forms for that customer in amounts under $25,000.  The firm allegedly was also unable to determine from its records the delivery dates or the check recipients.  FINRA determined that the customer’s signature was forged on the checks, which were cashed at the same bank location where the RR maintained a personal account.

        FINRA Sanction.   Purshe Kaplan Sterling agreed to a $100K fine.   This is FINRA Case #2009016218601.   [April Disciplinary Actions]