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Regulatory Sanctions

Forgery: Presented With Choices, a Broker Goes With Option Two

April 9, 2019

by Howard Haykin


When pressed for time to complete a task - even one of an ‘administrative’ nature – an individual often has 2 choices: (i) cut corners to expedite the process; or (ii) take whatever time is needed to complete the task correctly and accurately. Unfortunately, the broker in this case took the expedient route to complete her “internal administrative” tasks and got caught.
The wrong choice cost this broker her job, her customer relationships, $5,000 in fines, and a 3-month suspension.



When 2 brokers moved their business practice from Merrill Lynch to Cadaret, Grant in August 2017, many of their customers followed them to Cadaret, where they opened brokerage and investment advisory accounts. While these accounts were initially assigned to just one of the brokers (“Broker One”), it was the customers' expectation that the other broker (“Broker Two”) would be added as a registered rep and investment advisor on their accounts at a later date.


That happened in January. However, in order for Cadaret to add Broker Two as an advisor on the customers’ investment accounts, the firm required that a new investment advisory agreement be executed for each account, with original signatures from Broker One, Broker Two and the customers.



WHAT WENT WRONG.    Broker Two encountered problems obtaining the necessary signatures on some of the investment advisory agreements. So, between January 10 and January 25, 2018, she took the expedient route in executing the agreements.


  • Broker Two forged the signatures of 7 customers who lived out of state, without the customers' knowledge or approval - to avoid mailing the agreements to the customers for their signature. (Really !!??)
  • Broker Two forged Broker One’s signature on 17 investment advisory agreements, without that broker’s knowledge or approval - to avoid the inconvenience of driving to Broker One’s office to obtain his genuine signature. (Really !!??)


Cadaret Advisory Services Department picked up on the forged signatures and, as a result, the Firm did not approve or process the investment advisory agreements.


By virtue of the foregoing, Broker Two had violated FINRA Rule 2010.



This case was reported in FINRA Disciplinary Actions for March 2019.

For further details, go to ...  FINRA Disciplinary Actions Online, and refer to Case #2018057513901.