Pedigo submitted a fixed annuity contract for his customer with an insurance company. The insurance company issued the annuity contract and sent it to Pedigo in accordance with its selling agreement. The insurance company never received the customer’s executed annuity contract confirmation (ACC); and, as a result, mailed letters to Pedigo numerous times requesting that he have the customer sign and return the ACC. 

Pedigo informed the insurance company that the customer was deceased and requested paperwork to submit a death claim.  According to the insurance company, it never received the death claim paperwork. After receiving a surrender request form that same day, the insurance company contacted Pedigo to inform him that a full surrender could not be processed because the customer was deceased. Amazingly, about a year after the customer had passed, Pedigo falsely informed the insurance company that the customer was still alive. Pedigo faxed the insurance company an ACC which the customer purportedly signed and dated almost 20 days after the customer had died.

Pappas converted funds totaling $157,563.75 from customer accounts, without the customers’ knowledge or authorization, and attempted to convert an additional $14,260 from another customer account.

Pappas misappropriated the funds by activating the online bill payment feature in the clients’ accounts and then directed payments to his personal credit cards. Pappas placed an unauthorized trade totaling $6,893.43 in a deceased firm customer’s account.

Pappas refused to respond to FINRA requests for information and testimony.

Cohen violated FINRA’s suitability rule by failing to understand or convey to customers the cost of a rider to a variable annuity, pursuant to transactions he recommended to customers. Cohen incorrectly communicated the imposed fee. Cohen did not understand the risks and rewards inherent in the variable annuity, with the rider feature, which he recommended to the customers.

Cohen conducted a trade in a deceased customer’s account with a purchase of $4,662 of an entity Class A mutual fund share. Cohen had discussed with this customer purchasing the entity’s Class A shares prior to the customer’s passing, and he had prepared certain paperwork for the transaction prior to the customer’s death, but the purchase had not been made at the time of the customer’s death. At the time of the transaction, Cohen did not consult with any representative of the deceased customer’s estate and also did not notify the firm that the customer had passed away.

In addition, Cohen failed to appear for a FINRA on-the-record interview.

Berry serviced a brokerage account a relative held but did not have power of attorney or discretionary authorization over the account. Berry failed to report his relative’s death to his member firm, and after leaving the firm, he removed funds from the account totaling $70,000 by requesting checks be drawn on the account, sent to her listed address, which was the same as Berry’s home CRD address, and deposited the checks in a joint checking account he shared with his relative. When Berry submitted a written withdrawal request to the firm for $10,000, the firm discovered that the signature did not match the signature on file for the customer and froze the brokerage account after Berry acknowledged his relative’s death with the firm’s customer relations staff.

The Firm amended Berry’s Form U5 to reflect an internal review of his withdrawals and his failure to advise the firm of his relative’s death.