Securities Lawyer Blog | Victim of Fraud?

TAG | broker falsifying information

Nov/12

29

Jacksonville, FL, Rep Suspended and Fined for Insurance Scam

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The following information is from FINRA’s website under “Disciplinary and Other FINRA Actions, November, 2012.”

Evan Coley Eggers (CRD #5205969, Registered Representative, Jacksonville, Florida)

fined $5,000 and suspended from association with any FINRA member in any capacity for six months. Without admitting or denying the findings, Eggers consented to the described sanctions and to the entry of findings that
he made premium payments for his customers’ life insurance policies, using his personal funds to make the payments.

FINRA’s findings stated that each payment was submitted to his member firm via a money order, a practice forbidden by company policy. On each money order, Eggers falsified the customer’s signature. On a couple of occasions, Eggers falsified the customer’s signature to reduce the value of a life insurance policy.

The FINRA findings also stated that all insurance policies at issue were less than one year old. By continuing payment of the premiums, all policies remained active through a period of 13 months, thus qualifying Eggers for potential remuneration.

The suspension is in effect from October 1, 2012, through March 31, 2013. (FINRA Case #2011026438701)

If you or a family member have become alleged victims of annuity or insurance fraud, contact an attorney at Soreide Law Group for a free consultation on how to recover your investment losses. To speak with an attorney, call 888-760-6552, or visit http://www.securitieslawyer.com.
Soreide Law Group, PLLC, representing Insurance Fraud Victims in Federal Court, State Court, and before the Financial Industry Regulatory Authority (“FINRA”).

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Jun/12

21

James Thomas Corne, South Carolina, Suspended and Fined by FINRA for Falsifying Customers’ Signatures

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James Thomas Corne (CRD #4184489, Registered Representative, Duncan, South Carolina)

 

fined $5,000 and suspended from association with any FINRA member in any capacity for three months.  Without admitting or denying the findings, Corne consented to the described sanctions and to the entry of findings that he falsified customers’ signatures on various securities and non-securities-related documents.

Accoding to the FINRA investigation, Corne directed his assistant to cut a customer’s signature from a variable universal life (VUL) application and affix it to another VUL application. These findings stated that there were other occasions, customers’ signatures were cut and pasted onto variable annuity (VA) applications, a fixed annuity application and automobile insurance policies.

These documents with the cut and pasted signatures were then submitted to Corne’s member firm or the relevant insurance company for processing.

FINRA’s suspension is in effect from May 7, 2012, through August 6, 2012.

(FINRA Case #2010022792501)

 

This information was on FINRA’s website under “Disciplinary and Other FINRA Actions, June, 2012. 

 

Securities Lawyer, Lars K. Soreide, of Soreide Law Group, PLLC, has represented clients nationwide. Call for a free consultation on how to potentially recover your losses. To speak with an attorney call 888-760-6552, or visit our website at: http://www.securitieslawyer.com.

 

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Apr/12

16

Aventura, FL, Rep Barred by FINRA

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The following information is from FINRA’s website under “Disciplinary Actions, March, 2012:
 
Erick Enrique Isaac (CRD #5691821, Registered Representative, Aventura, Florida)
 
submitted a Letter of Acceptance, Waiver and Consent in which he was barred from association with any FINRA member in any capacity. Without admitting or denying the findings, Isaac consented to the described sanction and to the entry of findings that he became associated with a member firm at the behest of a former registered representative.
 
The findings stated that the unregistered person, who also is Isaac’s relative, needed access to a broker-dealer to place trades for his customers. While registered with the firm, Isaac relayed trading instructions from his relative to another representative at the firm, who entered the trades. Immediately after he became registered with the firm, Isaac began transferring hundreds of thousands of dollars of commissions on those securities transactions to his relative.
 
The findings also stated that Isaac knew that his relative surreptitiously controlled the trading in at least some of the customer accounts that generated the commission payments. Even after Isaac learned that FINRA had barred his relative from association with a member firm, he continued to transfer commission monies to him.
 
The findings also included that Isaac signed a fabricated consulting agreement with a company purportedly controlled by another relative to facilitate the transfer of $339,000 in commission money to his other relative; sent $155,000 of commission money to another relative, knowing that the former registered representative was the true beneficiary of that money transfer; gave thousands of dollars of commission money in cash to his relative; and acting on his relative’s instructions, completed sets of trade reports-one designed for the firm that included commission markup and markdown information, and a second set for the customers that did not include that information.
 
FINRA found that Isaac received at least $60,000 in compensation from his relative for these acts.
(FINRA Case #2010020869802)
 
The information from FINRA’s website has ended.
 
Securities Lawyer, Lars K. Soreide, of Soreide Law Group, PLLC, has represented clients nationwide.
For a free consultation with an attorney, please call 888-760-6552, or visit our website at: www.securitieslawyer.com.

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Feb/12

28

Palm Harbor, FL, Rep Barred by FINRA

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The following information was obtained on FINRA’s website’s ‘Disciplinary Actions, February 2012.”
 
Neal Seth Smalbach (CRD #1459854, Registered Principal, Palm Harbor, Florida)
 
submitted an Offer of Settlement in which he was barred from association with any FINRA member in any capacity.
 
Without admitting or denying the allegations, Smalbach consented to the described sanction and to the entry of findings that he fraudulently misrepresented the risks and omitted material facts, for the sale of an oil and gas private placement
investment to retired, senior citizen customers. The findings stated that Smalbach claimed to have conducted his own due diligence, which included reviewing the PPM, subscription agreement, promotional material and speaking with employees of the issuer and firm due diligence personnel.
 
These findings also stated that Smalbach told investors that the investment was safe and high-yielding, which was false and misleading, and Smalbach virtually guaranteed his customers a yearly dividend and the return of their principal after three years but omitted telling them that the company had no significant assets, no current cash flow, and no prior operating history which was disclosed in the subscription agreement and PPM.
 
In addition, FINRA determined that Smalbach’s recommendations were unsuitable to unaccredited customers in light of the customers’ age, limited investment experience, conservative risk tolerance and need for the preservation of principal and also unsuitable for accredited investors because of his misrepresentations and omissions of material fact.
 
These findings also included that Smalbach’s member firm required customers to complete a client information new account form that asked for customers’ contact information, investment experience, risk tolerance, investment objectives, net worth, annual income, liquid net worth, retirement horizon and other background information, and to complete subscription agreements the firm kept and maintained, but Smalbach asked customers to sign blank information forms and subscription agreements and initial risk and financial disclosures on the subscription agreement without giving some of the customers the opportunity to read what they were signing. FINRA found that Smalbach had an administrative assistant complete the forms with false information Smalbach provided, which enabled him to shroud unsuitable transactions from the firm’s supervisory review.
 
Moreover, FINRA found that Samlbach falsified client information new account forms and subscription agreements that the firm kept and maintained caused its books and records to be inaccurate. FINRA also found that as a result of these fraudulent misrepresentations, omissions and acts, Smalbach caused customers to sustain approximately $840,116 in net out-of-pocket losses on the $925,000 investment they purchased, and Smalbach received $74,000 in gross commissions from his activities. Furthermore, FINRA found that Smalbach failed to adequately respond to FINRA requests for information and documents.
(FINRA Case #2010021972801)
 

The information from FINRA’s website has ended.
 
Securities Lawyer, Lars K. Soreide, of Soreide Law Group, PLLC, has represented clients nationwide.
For a free consultation with an attorney, please call 888-760-6552, or visit our website at: www.securitieslawyer.com.

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Feb/12

7

Deerfield Beach, Florida, Rep Fined and Suspended by FINRA

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The following information was obtained on FINRA’s website’s ‘Disciplinary Actions, January 2012.”
 
Bradley John Delp (CRD #1701698, Registered Representative, Deerfield Beach, Florida)
 
submitted a Letter of Acceptance, Waiver and Consent in which he was fined $25,000 and suspended from association with any FINRA member in any capacity for two months. The fine must be paid either immediately upon Delp’s reassociation with a FINRA member firm following his suspension, or prior to the filing of any application or request for relief from any statutory disqualification, whichever is earlier.
 
Without admitting or denying the findings, Delp consented to the described sanctions and to the entry of findings that he failed to provide prompt written notice to his member firm that he was employed by, or accepted compensation from, another person as a result of outside business activities. The findings stated that Delp was a shareholder and employee of an independent insurance agency who brokered fixed-term or whole life settlements for his insurance customers, and his insurance agency received a commission for most of the life settlement transactions it brokered.
 
The findings also stated that many years after Delp joined the firm and disclosed his outside business activity, the firm revised its WSPs to prohibit its registered representatives from participating in life settlements unless processed through the firm
and limited to products the firm offered through approved firm sponsors. Delp’s outside
business insurance company facilitated insurance company customers’ sales of fixed-term or whole life insurance policies to third-party companies. The life settlements were not brokered through the firm and most were not brokered with approved firm sponsors as required by the firm’s revised procedures. The findings also included that Delp formed a company in which he owned a half-interest. The company’s business was to negotiate, on behalf of Delp and other participating individual insurance brokers, commission rates from life insurance companies for insurance policies that they brokered.
 
FINRA found that Delp’s administrative assistant completed online Firm Element continuing education (CE) training courses for him. FINRA also found that Delp used, or directed his staff to use, copies of signature transparencies for customers to generate third-party checks, wire transfers and to journal money from related customer accounts although the customers had orally authorized the transactions.
 
The suspension is in effect from December 5, 2011, through February 4, 2012.
(FINRA Case #2009018233803)
 
The information from FINRA’s website has ended.
 
Securities Attorney, Lars Soreide, of Soreide Law Group, PLLC, has represented clients nationwide. If you or a family member have sustained investment losses through Bradley John Delp of Deerfield Beach, FL, or losses due to your stock broker or financial advisor’s recommendations, call for a free consultation on how to potentially recover your losses. To speak with an attorney call 888-760-6552, or visit our website at: www.securitieslawyer.com.
 
Soreide Law Group, PLLC., representing investors nationwide before FINRA the Financial Industry Regulatory Authority.

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Aug/11

10

Citigroup Fined $500,000 by FINRA for Failing to Supervise Sales Assistant Who Misappropriated Funds

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WASHINGTON – On FINRA’s website, August, 10, 2011, The Financial Industry Regulatory Authority (FINRA) announced that it has fined Citigroup Global Markets, Inc. $500,000 for failing to supervise Tamara Moon, a former registered sales assistant at the firm’s branch office in Palo Alto, California. Over an 8 year period, Moon misappropriated $749,978 from 22 customers, falsified account records and engaged in unauthorized trades in customer accounts.  

FINRA reported that Moon took advantage of Citigroup’s supervisory lapses at the branch and targeted elderly, ill or otherwise vulnerable customers whom she believed were unable to monitor their accounts. Moon’s victims included elderly widows, a senior with Parkinson’s disease and her own father.  

Brad Bennett, Executive Vice President and Chief of Enforcement said, “Tamara Moon used her knowledge of Citigroup’s lax supervisory practices at the branch to take advantage of some of the firm’s most vulnerable customers, including the elderly. Citigroup had reason to know what she was doing and could have stopped her.”

Also, FINRA found that Citigroup failed to detect or investigate a series of “red flags” that upon further inquiry should have alerted the firm to Moon’s improper use of customer funds. The red flags included exception reports highlighting conflicting information in new account applications and customer account records reflecting suspicious transfers of funds between unrelated accounts. Citigroup also failed to implement reasonable systems and controls regarding the supervisory review of customer accounts, thus enabling Moon to falsify new account applications and other records.

FINRA reported that in one incident, Moon misappropriated nearly $80,000 from an elderly widow’s account. An exception report highlighted two address discrepancies in the customer’s account documents where the street address did not correspond to the city and zip code provided for the address and the telephone prefix did not match the zip code of the address. Moon, who had entered the account information, attempted to explain to Citigroup that the discrepancies arose because the client had moved to Arizona, an explanation that did not seem reasonable. Nonetheless, Citigroup accepted Moon’s explanation without further inquiry, thus enabling Moon to continue her misappropriation of customer funds. Citigroup also failed to detect suspicious activity involving transfers and disbursements in the accounts Moon used to misappropriate customer funds.  

 Additionally, Moon created an account in the name of a deceased customer even after Citigroup had been notified that the customer was deceased. Moon then created a fraudulent account in the name of the deceased customer’s widow. Moon transferred $10,440 from the deceased customer’s fraudulent account to the widow’s fraudulent account. A few weeks later, Moon had checks issued for $5,000 and $2,500 from the fraudulent account set up in the widow’s name to Moon’s personal bank account.

The FINRA report add that in a separate incident, Moon transferred $150,000 from an account held by a customer to a fraudulent account Moon created in her father’s name. Two days later, Moon transferred $90,000 from the fraudulent account in her father’s name to an account Moon controlled. Citigroup’s review of customer account records was deficient and prevented the firm from detecting red flags concerning Moon’s misconduct.

 In concluding these settlements, the firm neither admitted nor denied the charges, but consented to the entry of FINRA’s findings.

 This information was obtained on FINRA’s website.

Securities Attorney, Lars Soreide, of Soreide Law, PLLC, has represented clients nationwide. If you or a family member have invested Citigroup Global Markets, Inc., or Tamara Moon, call a Securities Arbitration Lawyer for a free consultation on how to potentially recover your losses.  To speak with an attorney, call 888-760-6552, or visit www.securitieslawyer.com.

Soreide Law Group, PLLC., representing investors nationwide before FINRA  the Financial Industry Regulatory Authority.

 

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