NOTE: Stipulations of Fact and Consent to Penalty (SFC); Offers of Settlement (OS); and Letters of Acceptance Waiver, and Consent (AWC) are entered into by Respondents without admitting or denying the allegations, but consent is given to the described sanctions & to the entry of findings. Additionally, for AWCs, if FINRA has reason to believe a violation has occurred and the member or associated person does not dispute the violation, FINRA may prepare and request that the member or associated person execute a letter accepting a finding of violation, consenting to the imposition of sanctions, and agreeing to waive such member's or associated person's right to a hearing before a hearing panel, and any right of appeal to the National Adjudicatory Council, the SEC, and the courts, or to otherwise challenge the validity of the letter, if the letter is accepted. The letter shall describe the act or practice engaged in or omitted, the rule, regulation, or statutory provision violated, and the sanction or sanctions to be imposed.

Thomas Michael Petracek
AWC/2008015144802

Petracek recommended the purchase of a fixed and variable annuity to a customer, and since he was not registered with any FINRA member firm, he was unable to sign the annuity application. Petracek’s relative became associated with a member firm, signed the customer’s annuity application and submitted it to his firm, and the annuity company listed the relative as the introducing agent after discussing the matter with principals of the firm. Petracek knew his relative was not present when the customer signed the annuity application or during any of his meetings with the customer at which the annuity was discussed, and he knew that his relative never met or spoke with the customer. 

Petracek became registered at the same firm as his relative, and the annuity transaction settled the day after Petracek became registered. Petracek’s relative later received a commission payment of approximately $50,500 for the annuity sale from the firm, which he shared with Petracek, and Petracek did not disclose to the firm that he shared in this commission payment.

During his employment at the firm, Petracek continuously served as the registered representative responsible for advising the customer on the annuity and for servicing the customer’s account in which the annuity was held at the firm, although the relative’s name remained on the account as the responsible agent. In addition, Petracek failed to take any steps to correctly disclose on the firm’s books and records that he—not his relative—was the responsible representative, rendering the firm’s records inaccurate.

Thomas Michael Petracek : Fined $10,000; Suspended 3 months

Tags: Annuity  Variable Annuity  Unregistered Person