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- 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
Brokers Caught ‘Shooting Blanks’ by FINRA
by Howard Haykin
FINRA CASE #2016051042201. Michael Isaac agreed to a $5K fine and a 30-day suspension to settle FINRA charges that he instructed a customer to sign at least 9 different blank forms, which included disclosure letters, new account forms, variable annuity applications and withdrawal forms, and return them to Isaac undated.
BACKGROUND. Isaac, a resident of Shrewsbury, MA, has been in the business since 1992, when he registered with FINRA as an Investment Company Products / Variable Contracts Rep. He was registered in this capacity with Investors Capital Corp from January 2009 through November 2015, and currently he is associated with another FINRA member firm. Isaac had no prior disciplinary history.
FINRA FINDINGS. From 2/12/15 through 5/13/15, while associated with ICC, Isaac instructed a customer to sign 9 blank and undated forms. The blank forms included disclosure letters, new account forms, variable annuity applications and withdrawal forms. Isaac later entered information onto those forms before submitting them to ICC for processing. The pre-signed forms that Isaac completed and submitted to his firm inaccurately implied that the customer had reviewed and approved all the information contained on the forms prior to affixing his signature.
FINRA CASE #2015046406801. Sammy Legaspi agreed to a $5K fine and a 3-month suspension to settle FINRA charges that he had customers sign blank forms, and in some instances made photocopies of blank-signed forms so that he could re-use the customers’ signatures.
BACKGROUND. Legaspi, a resident of Irvine, CA, entered the securities industry in 1993, when he registered as a General Securities Rep. He was registered in this capacity with Accelerated Capital Group from 2011 until August 2016, when he was permitted to resign. Legaspi is not currently associated with a member firm. He had no disciplinary history.
FINRA FINDINGS. Between June 2012 and August 2015, Legaspi had customers sign blank forms, and in some instances made photocopies of blank-signed forms so that he could re-use the customers' signatures. Legaspi maintained the blank-signed forms in his office and, at times, used forms that customers had signed when blank to effect transactions authorized by the client.
FINRA CASE #2016050244601. Matthew Smith agreed to a $5K fine and a 3-month suspension to settle FINRA charges that, in violation of his member firm’s WSPs, he maintained customer-signed but otherwise blank forms for clients to submit to his firm in connection with mutual fund exchanges.
BACKGROUND. Smith, a resident of Spartanburg, SC, entered the securities industry in July 2004 as a General Securities Rep. He was registered in this capacity with with ProEquities from 2012 to 2016. Smith currently is associated with another FINRA member firm. He had no prior disciplinary history.
FINRA FINDINGS. For much of the time he was with ProEquities - from 1/1/13 through 5/25/16 - Smith maintained approximately 122 customer-signed but otherwise blank forms for 47 clients to submit to ProEquities in connection with mutual fund exchanges. The pre-signed forms included Mutual Fund Investor Acknowledgments and Universal Switch Letters. As needed, Smith would complete and submit the forms to the Firm following execution of transactions. Pre-signing these forms was in violation of ProEquities' written supervisory procedures.