An irreverent Wall Street Blog
by Bill Singer
 
Join BrokeAndBroker blog on Facebook  Follow the BrokeAndBroker blog on Twitter  Connect with BrokeAndBroker on LinkedIn  Join Bill Singer on Google+  Subscribe to RSS Feed

Notary Duped Into Signing Off On Insurance Loans Fined And Suspended By FINRA
Written: June 1, 2012

For the purpose of proposing a settlement of rule violations alleged by the Financial Industry Regulatory Authority (“FINRA”), without admitting or denying the findings, prior to a regulatory hearing, and without an adjudication of any issue, Rochelle Leininger submitted a Letter of Acceptance, Waiver and Consent (“AWC”), which FINRA accepted. In the Matter of Rochelle Leininger, Respondent (AWC 2010024175201, May 29, 2012).

Leininger entered the securities industry as an employee of Merrill, Lynch, Pierce, Fenner & Smith, Inc. in November 1996, and subsequently obtained a Series 7 in 1999 and a Series 66 in 2003. The firm terminated her on August 23, 2010.

During the relevant times in this matter, Leininger was a California notary public. In September 2007, a former colleague registered at another firm asked Leininger to notarize customers’ signatures on three loan requests from their life insurance policies.  Apparently, the former colleague assured Leininger that the three customers had personally signed the documents; moreover, the AWC alleges that Leininger knew the three customers.

Unknown to Leininger, her former colleague had forged the customers’ signatures on the loan requests.  Leininger notarized the doucments by attesting to the veracity of the signatures.  Notably, the three customers were not present before her when she executed the notarizations and there is no indication that Leininger personally attempted to contact each of those individuals prior to affixing her seal and signature.  Thereafter, she faxed the notarized documents to the Hartford Life Insurance Company, which processed the requests without the customers’ prior knowledge and sent the funds to the former colleague.  The AWC alleges that the former colleague misappropriated the funds.

FINRA deemed that Leininger’s notarizations violated NASD Rule 2110, which requires the observance of high standards of commercial honor and just and equitable principles of trade.  According to the terms of the AWC,  Leininger was fined $5,000 and suspended for 90 days from association with any FINRA member firm in any capacity.

Bill Singer’s Comment

I publish this case to remind all brokerage industry employees who are also notaries that we are living in tough times, which prompt folks to do desperate things.  Your friends, your pals, your colleagues, your family – sometimes you just never really know what’s going on in their personal lives.  If you want to dig into your own pocket and lend a beleaguered buddy a few bucks, that’s one thing.  But when someone asks you to bend the rules because they forgot to get some paperwork or they’re in a rush or the client is gonna kill them if they don’t get this out, be afraid, be very afraid. Notably, never, ever, notarize a document that isn’t signed in front of you by someone whose identity you’ve confirmed.  If you’re lucky, in most states, that act of stupidity could result in a fine and/or loss of your notary commission; however, in some states, depending upon what you knew and what you notarized, you could be charged with a felony.

It’s easy enough to feel sympathy for Leininger.  She was duped by a former colleague into doing a “who’s gonna know” favor.  She likely took dangerously false comfort from the fact that she apparently knew the three customers. Notwithstanding, this seems a bit of a stretch for a self-regulatory organization to charge a notary for false notarizations — there are state laws to address such misconduct. On the other hand, what Leininger did was wrong and could easily have caused dramatic harm.

Many years ago when I served as a notary for a brokerage firm, a senior executive came into my office and asked me to notarize a real estate document that had his and his wife’s signature already on it.  He became irate when I refused to affix my notary seal and signature, and he actually went into my boss, the General Counsel, and tried to get me fired.  A few months later, it turned out that this executive had been in the midst of a bitter divorce and had forged his wife’s signature on a number of documents in an effort to transfer some assets.  Ultimately, I kept my job and the forger lost his.


 
[^top^]

Previous Entries
September 22, 2014
On September 22, 2014, the Securities and Exchange Commission ("SEC")announced the awward of $30 million to a whistleblower that is now the largest ma... Read On
September 22, 2014
The dog ate my homework. My alarm clock didn't go off. I'm sick and can't get out of bed. Oh my, how many of you have resorted to one of those legenda... Read On
September 20, 2014
Citigroup Stockbroker Mauled In Strip Mall DealSeptember 19, 2014Action -- it's an interesting concept when it comes to both gambling and investing. S... Read On
September 19, 2014
Action -- it's an interesting concept when it comes to both gambling and investing. Some folks love it. Crave it. Need it. Others are looking for a wa... Read On
September 19, 2014
This is an update of "USA To Gibralter To Cayman Islands Software Scam" (BrokeAndBroker.com Blog, March 17, 2014).It's the stuff of Hollywood mee... Read On
September 18, 2014
The Securities and Exchange Commission's ("SEC's) human lightning rod, Commissioner Daniel M. Gallagher, is at it again -- and he's got my attention (... Read On
September 18, 2014
You know, I really get some dumb crap via spam emails, as I'm sure you all do.  Most of the time, it's some idiot trying to get me to buy Canadia... Read On
September 17, 2014
For the purpose of proposing a settlement of rule violations alleged by the Financial Industry Regulatory Authority (“FINRA”), without admitting or de... Read On
September 17, 2014
Ah yes, here we go again with another one of Bill Singer's infamous "Yes but . . ." columns. We start off with a somewhat oddball fact pattern in whic... Read On
September 16, 2014
Stockbroker, Compliance, Legal, and Regulatory JobsEmployment Page BrokeAndBroker.com Jobs#wallstreetjobs @brokeandbrokerNOTICE TO EMPLOYERS... Read On
BrokeAndBroker.com Job Search
Related Topics
Tag Cloud
Internet FINRA Bear Stearns Bloomberg SEC NASD NYSE Money Laundering Due Diligence Waiver Forbes China Chepucavage Broy Woody Allen Madoff NAC NPR Marketplace Stanford UBS Ketchum Antitrust NASDAQ RRBDLAW Schapiro Bill Singer BrokerAndBroker USERRA Brokeandbroker.com Morgan Keegan Arbitration Counterclaim BrokeAndBroker.com Khuzami BrokeAndBroker Aleynikov Goldman Sachs brokeandbroker Promissory Note U4 Bill SInger EFL CFTC Huffington Post Flash Crash arbitration RBC RRBDLAW.com Ponzi Affinity Fraud Wachovia Raymond James BrokeandBroker.com Expungement Fraud Securities Fraud Outside Business Activity Registered Rep Magazine FOREX BrokerAndBroker.com FBI Banc of America Pro Se Supreme Court Morgan Stanley Smith Barney E*Trade Margin email Galleon Penson U5 Defamation Protocol Wells Fargo Punitive Damages Citigroup Merrill Lynch ARS Employee Forgivable Loan Street Legal Morgan Stanley AWC Fidelity Bankruptcy Broke And Broker HFT David Sobel Day Trading Ameriprise Commissions Spouse Schwab Commission CRD Kenneth Starr IRS CNBC Complaint ATM Skimming Hacking Phishing Malware Naskovets Poteroba Koval Lincoln Financial Selling Away Outside Business Activities Rakoff 2nd Circuit Second Circuit IRA 401k Forgery Tax RRBDlaw.com Email Netschi Moore Whistleblower Street Sweeper Tran Bharara Facebook Online Bonus Eligibility Rule TD Ameritrade Hedge Fund SAC 1099 Smith Barney Lehman Brothers IC3 Scottrade Lehman JPMorgan Chase Hertz Insider Trading Bank of America Department of Justice Elles Bribe Auction Rate Securities Raiding Spam Edward Jones Medicare Diabetes Dow Schumer Walter Bid Rigging Real Estate Discrimination Wall Street Statutory Disqualification Form U4 Form U5 Indictment Boyland DOJ Corruption bill singer FTC Do Not Call FINRA Arbitration Costa Rica Settlement LIBOR Varney Plea Rule 8210 RRBDlaw Appeal Fowler LPL Johnson US Airways Reg D MSSB Vault Loan SunTrust Discovery Employment Rosenthal Recruiting Lawyer Trading Platform JP Morgan Employment Tuesday Wrongful Termination Bank Guarantee WaMu Solicitation REIT Martin Credit Cards Away Account Credit Repair PN Advisor Placement Group Forex Mortgage Private Placement Moon Merrill Anderson Exam Lee Borrowing Tax Lien Conversion Oppenheimer Wedbush Felony Misdemeanor Expenses ING Lien OTR Estate Jobs Florida Credit Card Elderly Flash Drive Annuity Reimbursement FNMA BrokeAndBroke TIC DWI Promissory Notes Suitability Will POA Power of Attorney Casino NSF MF Global Counterfeit Preet Bharara Corzine Hacker RIA Prison Disclosure NASAA Aguilar FCPA Subway Identity Theft Gold Dell Bar Injunction Bank Deutsche Bank Hospital God HSBC Private Placements Eric Stein Wire Fraud CCO Joshua Brown Backstage Wall Street Obstruction of Justice Reuters Retaliation Variable Annuity Outside Account Options Telephone Wine Social Media ADA Pacifico Non-Prosecution Agreement Confirm Tax Fraud Retirement OBA Equity Indexed Annuities EIA MetLife Continuing Education OIP Tax Liens Willful CE Unregistered Impersonation Annuities BBVA Business Expenses ETF JOBS Act Mail Fraud Parking Variable Annuities Signatures BitTorrent Impersonator Wire Transfer Wire Crowdfunding Nasdaq Away Accounts WSP Laptop Dodd Frank Checks RMBS AML PST Solicited Unsolicited Congress SRO Wife Discretion Non-Solicitation Restaurant Commodities Private Securities Transaction Offer of Settlement Money Market employment jobs Great Recession Chase Investment Services Arrest Barclays Liens Failure To Supervise Apple Time And Price T&P Willfully Husband Letter of Authorization LOA Sexism Debit Card Knight Test Practice Sale Unfair Competition Signature Judgments Undisclosed Settlement Trainee Fee Trust Laser Side Bar Mattera Female Sales Assistant Kennedy Charge Sexist NML Argentina Embezzlement Silver Judgment Bank Fraud Deceased TSSB Mary Jo White Trustee Frumento Conspiracy 6th Circuit Proctor Rule 3040 Class Action Beneficiary NYAG Schneiderman Gallagher White Self Regulation Short Sale Compromise Website TRO Supervision Vacatur SDNY BrokeAndBroker Bill Singer Piwowar Rule 1122 Article V signature VA Regulation SP Rule 3270 OWB Stockbrokers
 
Email Bill Singer Connect with Bill Singer on Facebook Follow Bill Singer on Twitter Link up with Bill Singer on LinkedIn Join Bill Singer on Google+