Charles sold variable universal life insurance products to his member firm’s customers and after leaving the firm, Charles remained the assigned representative on the accounts and received modest annual “trailing commissions.” Charles’ former firm asked him to pay a “single appointment” fee of $100 to the firm or submit customer-signed “Telephone or Electronic Transaction Authorization” forms for him to continue to service the customers’ accounts. Charles chose to do neither, but when he realized the deadline was approaching, he signed the customers’ names on the authorization forms without the customers’ permission and sent them to the firm via facsimile.
One of the customers complained that Charles had not being authorized to sign her name on the authorization form; therefore, Charles’ former firm notified Charles and his present firm of the customer’s allegation and asked Charles for a written explanation. During Charles’ present firm’s investigation into the complaint, he made misstatements, verbally and in writing, to the firm, denying forging the signatures and fabricating a story to prevent the firm from discovering his misconduct. Also, Charles subsequently admitted to the firm that his alibi was false and that he signed the customers’ names without authorization.
Kruse entered into a settlement agreement regarding a customer complaint without authorization from, and without notifying, his member firm.
Kruse sold a customer a variable life insurance policy which required payment of monthly premiums by automatic withdrawal from the customer’s bank account. Thereafter, the customer complained to Kruse that he had not been aware of the monthly withdrawals from his bank account and about the performance of the policy. The customer threatened to direct his complaint to the state insurance commissioner if Kruse did not resolve the situation to his satisfaction; Kruse then paid the customer $4,000 to settle the complaint.