AWC/2009020124301/December 2011
AWC/2009020835202/October 2011
AWC/2009019969801/October 2011
Pletscher exercised discretion in customer accounts despite the fact that his member firm’s WSPs strictly prohibited discretionary trading in customer accounts, and he was aware of this prohibition.
The firm required that its registered representatives place trade orders immediately after receiving the customer’s authorization for trades, but at times Pletscher received oral authorization from customers to place trades in their accounts, yet he waited several weeks or months before placing the trades.
Pletscher requested to have variable annuity holdings for customers transferred into money market accounts without the customers’ authorization. The customers requested the unauthorized transactions be reversed, causing his firm to incur reversal fees of $8,863.37.
Pletscher’s firm required its customers review and sign transaction related forms, but Pletscher instructed customers to provide transaction forms that contained only the customers’ signatures, which Pletscher later completed and submitted to the firm for processing, despite his firm prohibiting him from accepting incomplete forms from customers. Pletscher knew that by allowing his customers to pre-sign blank forms, he failed to ensure that customers had properly reviewed and understood the agreements they had signed. In addition, Pletscher caused the firm’s books and records to be false and misleading and to appear that the customers had agreed to the terms of each form on the date the forms were signed in blank.
AWC/2009020539701/October 2011
Goel placed a customer’s signature on statements he prepared in connection with providing a rationale for his recommendations that the customer sell mutual funds and invest the proceeds in an equity-indexed annuity and a variable annuity, without the customer’s knowledge, authorization or consent.
Unbeknownst to Goel, the firm did not require a customer’s signature on the registered representative’s statement of rationale.
2008013683902/September 2011
Kimberly and Richard Morrison engaged in outside business activities without providing their member firm with written notice of their outside business activities. For nearly three years, Richard Morrison was the agent for transactions in annuities, which his firm had not approved for sale, that he sold through an insurance agency. In connection with these transactions, Richard Morrison met with customers, recommended that the customers purchase the annuities, completed and signed transaction paperwork and earned approximately $425,000 in commissions.
Richard Morrison failed to disclose the outside activities to his firm on annual questionnaires and actively concealed his outside business activities from his firm.
Richard Morrison had employees of the insurance agency sign paperwork effecting the exchanges; in each of these instances, he signed and was identified as the agent of record on the application that was sent to the insurance company that issued the new policy that was purchased. The insurance agency employees signed the exchange request forms that were sent to Richard Morrison’s firm instructing it to surrender a policy and forward the proceeds for the purchase of a new policy; as a result, his firm did not see that he had recommended and was the agent for the transactions.
In addition, for nearly two years, Kimberly Morrison was listed as the agent for transactions in annuities that took place away from her firm. Moreover, in connection with these transactions, Kimberly Morrison telephoned customers to solicit them to meet with Richard Morrison and/or herself, accompanied Richard Morrison to some meetings with customers, and completed and signed transaction paperwork as the agent of record. Furthermore, the insurance agency paid Kimberly Morrison $7,483.53 in commissions on the transactions; she did not notify her firm of her involvement in any of the transactions, and did not disclose them in her firm’s annual broker questionnaire.
Richard Thomas Morrison (Principal): Barred
Kimberly Ann Morrison: Fined $10,000; Suspended 1 year
AWC/2009019380701/June 2011
AWC/2009017244601/June 2011
Mahler improperly created answer keys to state insurance continuing education (CE) exams a company administered.
The company’s president approached Mahler on different occasions and offered to provide him with answers to the company’s CE exams. The president provided Mahler with the answers to the CE exams over the phone or by handing copies of the answers to Mahler, and Mahler used these answers to create answer keys for the exams.
Mahler improperly distributed the answer keys to an employee at his member firm and to multiple registered representatives outside of his firm. On multiple occasions, while he was an external wholesaler, Mahler provided assistance to non-firm registered representatives while they were taking a state annuity examination for CE credit. Mahler was in the offices of some registered representatives while they were taking the annuity examination; some of these registered representatives asked Mahler to give them the answers to certain of the questions on the examination, which Mahler provided.
Mahler failed to supervise in that he gave one direct report answer keys to state insurance CE exams.
AWC/2010024945501/May 2011
Gould converted more than $1,315,000 from customers who had purchased annuities from him by, among other deceptive means and devices, convincing his customers to sign blank annuity withdrawal request forms, which he subsequently completed with instructions to the insurance companies to transfer his customers’ funds to a bank account held in the name of a company he owned and controlled. In some instances, the withdrawal request forms contained a medallion signature guarantee that he improperly obtained.
Gould converted funds from other annuity customers by using withdrawal request forms that contained customers’ signatures to direct insurance companies to transfer funds from the customers’ annuities to his bank account. Gould unlawfully converted customer funds from customers’ brokerage accounts by, among other deceptive means and devices, improperly transferring funds from their brokerage accounts to the bank account he owned and controlled. The customers either did not authorize or were not aware of the conversion resulting from the transfer of funds from their annuities and brokerage accounts to Gould’s bank account.
Gould used the unlawfully converted funds to pay for his own personal and business expenses; none of the customers were aware he was withdrawing funds for his personal use. On numerous occasions, Gould falsified documents to make it appear that customers had authorized the transfer of funds from their annuities and brokerage accounts to his bank account, and in some instances, effectuated these transfers by convincing customers to sign withdrawal request forms, some of which were blank.
AWC/2005002244704/February 2011
Bulinski made unsuitable recommendations to her elderly clients to purchase variable annuities. She repeatedly failed to tailor her recommendations to meet her customers’ individual investment needs, and instead recommended the same variable annuity to her customers, irrespective of age, investment experience, liquidity needs, financial situation and risk tolerance.
Bulinski recommended that elderly customers purchase the same variable annuity with an enhanced death benefit rider, but demonstrated that she did not have reasonable basis for her recommendation because some of the customers were too old to purchase the rider and the rest gained little, if any, benefit from the rider while paying a substantial cost for it. Bulinski recommended unsuitable variable annuities with a rider that was inconsistent with her customers’ investment objectives. In numerous instances, Bulinski demonstrated that she did not understand the variable annuity and inaccurately described the investment to a customer as a fixed annuity rather than a variable annuity, and with other customers, incorrectly stated the surrender period and surrender charges her customers would incur.
Bulinski was the subject of several written customer complaints about her lack of disclosure about surrender charges and other product details.
AWC/2010023931401/February 2011
Buchholz misappropriated approximately $1,350,000 from customers, a number of whom were retirees, by liquidating their variable annuities and/or mutual funds and then transferring the proceeds to his personal bank account, converting the proceeds for his own use and benefit. As part of this scheme, Buchholz falsely and fraudulently represented, at times by forging customer signatures on redemption documents, that certain customers had authorized the redemption of the securities in order to obtain the proceeds of the sale; fraudulently induced certain customers to authorize the redemption of securities, based on misrepresentations that the proceeds would be reinvested to the customers’ investment accounts; and caused checks to be drawn in the customers’ names and caused the checks to be sent directly either to his office or to the customers.
If the checks were sent directly
- to the customers, Buchholz convinced those clients to turn the checks over to him, making false and fraudulent representations that he would deposit the funds in their securities accounts to be reinvested; however, he did not reinvest the proceeds but instead deposited the checks into his personal bank accounts and used the proceeds for his own purpose;
- to his office, Buchholz simply deposited the checks in his own bank accounts for his personal use and sometimes forged the customers’ signatures in order to cash the checks.
AWC/2009016600001/February 2011
Beckett submitted an advertisement to a local newspaper, which listed an entity he owned as offering certain investments, including certificates of deposit (CDs) and fixed annuities, and that he did not submit the advertisement to his member firm for review and approval; moreover, the advertisement content included misleading statements regarding the offered investments.
Beckett maintained a website for an entity he owned, which was accessible to the investing public, and he failed to submit the website material to his firm for review until a later date. Beckett failed to obtain his firm’s written approval of the website content prior to its use.
Beckett completed an annual certification, which he provided to his firm and he answered “no” to the question asking whether he anticipated using any type of electronic communication systems such as the Internet for soliciting business.
AWC/2009016923602/February 2011
AWC/2007008935007/February 2011
Ware introduced several customers to a Stock to Cash program under which customers would pledge stock to obtain loans to purchase other products. Ware recommended a customer participate in the program under which the customer obtained loans of approximately $388,000 and pledged securities in support of these loans, using the proceeds to purchase fixed annuities through Ware.
Ware failed to conduct adequate due diligence concerning the operations or financial stability of the Stock to Cash program lender and failed to take sufficient action to determine whether his clients’ ownership interest in the pledged securities was adequately protected. Ware did not understand the potential risks inherent in the program and therefore did not have a reasonable basis for his recommendations.
- Accredited Investor
- Affirmative Determination
- AML
- Annual Compliance Certification
- Annual Compliance Meeting
- Annuities
- Annuity
- Appeal
- ATM
- Away Accounts
- Bank
- Bankruptcy
- Banks
- Best Efforts Offering
- Blank Forms
- Borrowed
- Borrowing
- Broadcast
- Campaign Contributions
- CCO
- CDs
- Check
- Check Kiting
- Checks
- Churning
- CIP
- Clearing Agreement
- CMO
- Commissions
- Communications
- Computers
- Concentration
- Confidential Customer Information
- Contingency Offering
- Continuing Education
- Conversion
- Corporate Credit Card
- Correspondence
- Credit Cards
- Customer Protection Rule
- Debit Card
- Deceased
- Discretion
- Do Not Call
- Due Diligence
- EIA
- Elderly
- Electronic Communications
- Electronic Storage
- Embezzled
- Escrow
- Estate
- ETF
- Expenses
- Expulsion
- False Statements
- Felony
- Finder Fees
- FINOP
- FOCUS
- Foreign Language
- FOREX
- Forgery
- Form ADV
- Freely-Tradable
- Futures
- Gifts
- Guaranteeing Against Losses
- Hedge Fund
- Heightened Supervision
- Impersonation
- Insider Trading
- Inspections
- Installment Plan Contracts
- Instant Messaging
- Insurance
- Internet
- Investment Advisor
- IRA
- Joint Account
- Life Insurance
- LOA
- Loan
- Loaning
- Margin
- Mark-Up Mark-Down
- Material Change Of Business
- Membership Agreement
- Minimum Contingency
- Money Laundering
- Mortgage
- Mutual Funds
- NAC
- Net Capital
- NSF
- Options
- OSJ
- Outside Accounts
- Outside Business Activities
- Parking
- PIPE
- Ponzi
- Power Of Attorney
- Private Placement
- Private Securities Transaction
- Producing Manager
- Production Quota
- Promissory Notes
- Proprietary Traders
- Public Appearances
- Referral Fees
- Reg D
- Reg U
- Regulation 60
- Regulation S-P
- REIT
- Research
- Reverse Mortgage
- RIA
- Rule 8210
- SAR
- SBA
- Scripts
- Shadowing
- Sharing Profits
- Signature
- Solicited
- Statutory Disqualification
- Stock To Cash
- Suitability
- Supervision
- Supervisory System
- Suspense Account
- Testing
- Third Party Vendor
- Time And Price Discretion
- Trading
- Trading Limits
- Trading Volume
- Trust Account
- Trustee
- U.S. Treasuries
- UIT
- Unauthorized Transaction
- Universal Lease Programs
- Unregistered Person
- Unregistered Principal
- Unregistered RRs
- Unregistered Securities
- Unregistered Supervisor
- Variable Annuity
- Variable Insurance
- Viaticals
- Website
- Willfully
- WSP
- WSPs