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, Michael J. Woods submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In the Matter of Michael J. Woods, Respondent (AWC 2011027621801, April 23, 2013).
Woods first became registered with FINRA in 1998; and during the relevant period of 2005 through June 15, 2011, he was registered with FINRA member firm Fortune Financial Services. The AWC asserts that Woods did not have any prior relevant disciplinary history with the Securities and Exchange Commission, any self-regulatory organization or any state securities regulator.
Signing For Elderly Customer
Between March 2007 and September 2007, Woods serviced the account of an arthritic, 78-year-old customer, who the stockbroker apparently believed needed help to manage his affairs. The AWC alleges that Woods obtained signature authority on this customer's bank account and in exchange for fees totaling at least $1,500, Woods wrote checks to pay the customer's monthly bills. Based on this conduct, the AWC asserts that Woods violated NASD Conduct Rules 3030 and 2110.
Additionally, in September 2007 Woods allegedly photocopied the elderly customer's signature from a previously signed variable annuity withdrawal form, and the stockbroker dated the new form, and submitted it to the annuity issuer. All of which might not have presented a problem for FINRA but for the fact that Woods submitted the document three days after the customer's death. Moreover, the AWC alleges that the withdrawn monies were deposited into deceased customer's bank account, which Woods then controlled as the trustee of the customer's trust. Thereafter, the AWC alleges that on September 3 and 14, 2007, and October 9, 2007, Woods issued checks drawn from that bank account to pay himself fees for "estate services" that he rendered as trustee. Based on this conduct, the AWC asserts that Woods violated NASD Conduct Rule 2110.
Finally, the AWC alleges that Woods failed to disclose until April 2011, federal tax liens that were levied in 2006 and 2007, in apparent violation of NASD Conduct Rule 2110 (for conduct before December 15, 2008), NASD IM-1000-1 (for conduct before August 17,2009), and FINRA Rules 1122 (for conduct after August 16, 2009) and 2010 (for conduct after December 14, 2008).
Summing It All Up
According to online FINRA records as of April 26, 2013, on June 15, 2011, Woods voluntarily resigned from Fortune Financial Services.
In accordance with the terms of the AWC, FINRA imposed upon Woods a $20,000 fine and a 2 year suspension from associating with any FINRA member firm in any and all capacities.
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