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Investor Protection

Office Manager Rifles Through Her Family’s Brokerage Accounts

June 26, 2020

by Howard Haykin



Yesterday, we looked at the case involving a broker with Northwestern Mutual who converted over $494,000 from his customers by forging their signatures on variable annuity distribution requests and depositing the proceeds into his personal bank account. [Financialish, 6/25/20]  Today’s case is a variation on that theme.



Between January 2016 and August 2017, an office manager with Horace Mann Investors, Inc., converted nearly $74,000 from the brokerage accounts of 2 family members who were out of the country. She took advantage of their absence by withdrawing the money from 2 deferred variable annuities policies through a series of 20 transactions.


Over the 20 or so months, the office manager forged her relatives’ signatures on Annuity Surrender/Withdrawal Request forms that directed Horace Mann to mail withdrawal checks to an address where the office manager had access. The office manager then retrieved and deposited the checks in a joint bank account she owned with both relatives, and later withdrew the funds for her own personal use. In order to cash the checks, she forged the endorsement signatures of both relatives.


In the end, Horace Mann reimbursed the customers and made them whole by restoring their respective annuity positions in the amounts that had been improperly withdrawn.  The office manager was barred from the industry.



INVESTOR TAKE AWAY.    The couple in this case study were foolish or naïve to provide their relative, the office manager, with relatively unfettered access to their brokerage accounts, bank account, and incoming mail. Access to all three enabled the office manager to literally and figuratively 'take her relatives to the bank'.


Where possible, fiduciary responsibilities – i.e., access to financial accounts and mail - should never be assigned to just one person, but to multiple persons. Remember: There’s no shame in safeguarding against ‘worst case scenarios’, and the risk of offending someone should be ‘slim to none’.



[For further details, click on … FINRA Case #2019064265601.]