January 24, 2022
It is always disconcerting when elderly customers change their wills in order to leave eye-opening bequests to their stockbrokers or financial advisors. There are many decent men and women on Wall Street, and they often service their elderly customers with affection and unimpeachable rectitude. On the other hand, there are many predators on the Street. In a recent FINRA regulatory settlement, we seem to have a swirl of considerations involving a stockbroker and an elderly widow. Frankly, it's next to impossible to reconcile FINRA's allegations with FINRA's sanctions, which raises many questions.
Case in Point
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, Dinu Marian Tise submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In the Matter of Dinu Marian Tise, Respondent (FINRA AWC 2019064722601)
The AWC asserts that Dinu Marian Tise was first registered in 2003, and by October 2012, he was registered with J.P. Morgan Securities LLC until his November 26, 2019 discharge.
2009: 79-year-old-widow Customer A
As alleged in the AWC, in 2009, a 79-year-old individual became a customer of Tise's after her husband's death (the customer is referred to as "Customer A").
2013: Customer A Estranged from Relatives
As further alleged in the AWC:
2013, Customer A, who was not related to Tise, advised him that she had become
estranged from her only living relatives. Tise referred her to an attorney. The attorney
drafted, and Customer A executed, a will that removed Customer A's family members as
beneficiaries and left her entire estate to a charitable trust.
2019: An Unsigned Will and a Typed/Handwritten Will
In 2019, Customer A, now 89, engaged the same attorney referred by Tise to draft another will in which Tise was named a beneficiary and left a six-figure sum -- and the AWC asserts that "Tise was aware of the customer's intent to name his as a beneficiary." Notwithstanding Customer A's intentions, the AWC states that she never signed a will setting out the above-referenced terms. Subsequent to the aborted re-drafted will, the AWC advises us that:
October 2019: Customer A Complains
In June 2019, Tise typed a will for Customer A that named Tise as the primary
beneficiary, which would have resulted in a bequest of over $5 million to him. Tise
provided the typed will to Customer A to use as a guide to write by hand a new will. Two
days later, Customer A handwrote and signed a will that was nearly identical to the
version provided to her by Tise. Customer A then took the handwritten will to a
competency examination her lawyer had arranged for her. The handwritten will was valid
under applicable state law until Customer A executed the new will discussed below.
Although that redrafted will never got executed by Customer A, she did handwrite a new will naming Tise as her primary beneficiary with a $5 million bequest. Inexplicably, within four months of the handwritten will, things took a nasty turn:
In October 2019, Customer A complained to the firm, had her account assigned to a
different registered representative, and signed a will that did not name Tise as her
FINAR Alleges Misconduct
FINRA alleged that from March 2019 to October 2019, in violation of FINRA Rule 2010, Tise acted unethically by circumventing his firm's
policies and procedures when he caused Customer A to draft and sign a will bequeathing him a seven-figure sum and by concealing his conduct from his firm:
Despite being aware of the draft but unsigned will and the signed June 2019 handwritten
will naming Tise as a beneficiary, and contrary to firm policies and procedures, Tise did
not disclose to the firm that Customer A had named him as a beneficiary and never
instructed Customer A to remove him from the will. In August 2019, Tise also provided a false compliance attestation that stated he had reported to the firm any potential or actual
violations of its policies, despite knowing that being named a beneficiary of Customer
A's will was a violation of firm policy. Additionally, in October 2019, during an
interview with a firm investigator, Tise initially denied that he had typed the will for
Customer A to copy before he voluntarily corrected that misstatement later the same day.
In accordance with the terms of the AWC, FINRA imposed upon Tise a $7,500 fine and a six-month suspension from associating with any FINRA member in all capacities.
Bill Singer's Comment
Sorry but I can't reconcile the fact pattern in the AWC with FINRA's assertion of a Rule 2010 violation with FINRA's imposition of what comes off as a tepid fine and suspension. It may be that Tise's conduct wasn't as bad as FINRA made it out in the AWC. It may be that Tise had some convincing explanations for all that transpired and, who knows, perhaps given Customer A's estrangement from her family, Tise stepped into the breach with compassion. We don't know. We should know. The AWC shouldn't be playing guessing games with such a fact pattern. Sadly, we are left to ponder yet another in a long line of AWCs that just doesn't add up when it comes to elderly clients and their bequests to industry participants. Also READ:
FINRA Fines and Suspends Rep Over False Attestations Involving an Elderly Widow's Beneficiary Designation (BrokeAndBroker.com Blog / September 1, 2021)
An Elderly Grandma and Sister Who Wasn't and the New VA Beneficiaries (BrokeAndBroker.com Blog / February 18, 2021)