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.

Michael Keith Paul
AWC/2007010688901

Paul's member firm warned him not to exercise discretion in customers’ variable annuity sub-accounts and required him to sign a warning letter to evidence his understanding of the firm’s policies regarding the use of discretion within customer accounts. Nevertheless, Paul exercised discretion in customers’ accounts without discussing the transactions with the customers. Paul had verbal authority from the customers to exercise discretion but no written permission. The transactions did not result in any fees or charges to the customers nor did the transactions yield any compensation for Paul. 

Michael Keith Paul: Fined $5,000; Suspended 10 business days