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Regulatory Sanctions

Registered Principal Fined, Suspended for Using and Altering Pre-Signed Customer Documents

February 13, 2018

by Howard Haykin


Jeffrey Smith agreed to pay a $5K fine and serve a 3-month suspension to settle FINRA charges that he maintained and used pre-signed and altered forms.


FINRA FINDINGS.    Smith, a broker with 22 years’ experience with 5 firms, held 3 principal/supervisory licenses - Series 53 (Muni Bonds); 24 (General Securities); and, Series 8 (General Securities Sales). Over a 3-year period, Smith maintained and utilized pre-signed and altered forms. Specifically, he had 3 customers sign blank forms and made additional photocopies of some of the blank-signed forms so that he could re-use the customers' signatures.


At times, Smith utilized the blank-signed forms to effect transactions authorized by the clients. On another occasion, Smith, with the client's authorization, submitted an altered, pre-signed form upon which correction fluid had been used to white out and correct an inaccurate bank account number. These actions caused his member firm to have inaccurate books and records


FINRA SANCTIONS.    On first blush, Smith's 3-month suspension seemed a tad harsh. However, here's what FINRA took into consideration: (i) four years earlier, Smith settled FINRA charges that he failed to effectively supervise the activities of associated persons; (ii) Smith's “copying and pasting” spanned a 3-year period; and, (iii) Smith altered information on a document on at least on one occasion.


This case addressed in this article was reported in FINRA Disciplinary Actions for November 2017.

For details on this case, go to ...  FINRA Disciplinary Actions Online, and refer to Case #2012033566202.