|
Daniel Allen Abbott
presented unapproved seminars to promote the sale of
reverse mortgages and solicit various types of investments
from senior citizens. Among conduct cited by FINRA, was
Abbott's use of improper invitations, and
of a slide and handouts that
projected unfounded claims of future performance.
|
Reverse
Mortgages are coming under regulatory scrutiny because of
reports of senior-citizen abuse, and this case seems to
confirm that FINRA is indeed watching this area. Note
that seminar materials themselves may constitute advertising
materials requiring filing and/or review -- as in the
case of the slides. |
|
Filiep Paul Sackx distributed newsletters
and seminar invitations that a
principal of his member firm had not approved for
distribution. One of
the newsletters referenced an unregistered entity through
which Sackx engaged in business but did not disclose the
relationship between his firm and the unregistered
entity. The invitations and Sackx' Web site
misrepresented that he was the author of books.
|
With
prospecting for new clients proving daunting in this
recessionary landscape, many RRs are turning to newsletters,
seminars, and websites to reach potential customers.
As always, what may strike a stockbroker as fair and
reasonable may be seen quite differently by the employing
firm's Compliance Department or any number of regulators. |
| Michael Timothy Williams
provided a prospective client with a piece of sales
literature for a variable annuity that he had falsified by
deleting the original time periods for charges (replacing
with handwritten shorter terms that falsely depicted lower
charges for withdrawals) and crossed out certain
expenses/charges. |
Variable
Annuities (VAs) are another area that has come under
enhanced regulatory scrutiny in the past couple of
years. This case raises troubling questions -- what can
customers rely on and who can they trust?
RRs may not be subject to a fiduciary standard that exalts the client's interests
above all else but, still, (without first looking) tell me what you think the
fine and suspension should be in this case -- and they tell
me if you think the sanctions imposed seem fair. |
| Kareem
Isadore Washington assisted customers in opening fraudulent bank
accounts through the use of
falsified identifying information and with initial deposits
via counterfeit checks drawn on the accounts of
the firm's other customers. Despite knowing the above,
Washington made branch and automatic teller machine
withdrawals for the customers. He received approximately $4,700 in
compensation for assisting in the scheme. The bank lost a total of
$43,093.81 from the scheme. |
It's
out there folks. This isn't just the storyline of a
new movie or television show. Just because it's a
bank, just because some guy is dressed in a suit, just
because the checks look real and the ATM machine seems safe,
no longer means squat. As if the Madoff scam and
others haven't made it clear by now: Wall Street is a world
of appearances, smoke, and mirrors. All in all, more
good guys than bad but it only takes one Madoff or one
Washington to cause a whole lot of hurt to a whole lot of
victims. |
| Preston Douglas Runyan
affixed the signature
of a public customer's spouse to a spousal consent
provision on an individual retirement account
application without the spouse's permission and
authorization. Runyan signed his name on the application as
witnessing the spouse's signature, which he had not. |
At
the time -- and that's always the explanation my clients
give to me -- this probably seemed like a good idea.
In the aftermath, the broker typically learns that the
husband and wife were going through a separation or divorce,
or that one spouse's promise that the other was okay with
the transaction proves to have been false. The road to
Hell is paved with good intentions, but many of those
intentions are simply poor business decisions and foolish
risks. |
