The Certified Financial Planner Board of Standards Inc. on Wednesday took public disciplinary actions against the right of 20 advisors to use the CFP mark. The Board permanently revoked six licenses, suspended four and issued letters of admonition.
Among the 20 CFPs who are being censured by the Board, seven had filed for Chapter 7 bankruptcy while two others filed for Chapter 13 bankruptcy. On Jan. 19, the Board, which oversees the nation's 64,000 CFPs, proposed a rule that would eliminate disciplinary proceedings over bankruptcy filings and replace them with disclosure requirements. (See the article, Financial Planner Bankruptcies Rising; CFP Board Tackles Issue).
At the time Michael P. Shaw, managing director of professional standards and legal at the CFP Board, acknowledged that bankruptcy by CFPs is on the rise. "In 2009 we had about eight or nine bankruptcy cases; that number doubled to 20 in 2010 and last year we had 48."
One advisor whose CFP license was permanently revoked was Robin Davidson, of Santa Barbara, Calif., after the Board in December investigated allegations that Davidson used an outside e-mail account to avoid detection by his broker-dealer's internal controls; recommended that his clients invest in a managed currency program that was not approved by his broker-dealer; and failed to provide his broker-dealer with notice of his involvement in private securities transactions.
In addition, the Board said taht Davidson informed his clients that the fund was a safe investment when, in fact, it was not safe; did not inform his clients that the fund was highly leveraged, operated on margin and was not approved by his broker-dealer; did not disclose his compensation arrangement with the fund's managers to his clients or his broker-dealer; signed a customer's name to account-related documents without the customer's knowledge or consent on at least 16 occasions; was suspended by the Financial Industry Regulatory Authority and had his securities license revoked by the Maryland Securities Division for failing to respond to the Maryland Attorney General's order to show cause.
Five other CFPs who had their certification marks revoked include:
Sandee G. Tanner, of Brooksville, Fla., who the Board alleged had violated its disciplinary rules of conduct and failed to file an answer to the Board's complaint within 20 calendar days of the date of service;
Leslie A. Morpeth, of Las Vegas, Nev., for her Chapter 7 bankruptcy. Morpeth also failed to file an answer to the Board's complaint within 20 calendar days of the date of service;
Timothy T. Bean, of Portland, Ore. after a Board investigation determined that Bean had failed to repay the balances due on a supplementary training agreement, program agreement and retention award he entered into with his former employer;
Charles I. Alvarez of Houston, Texas, after the Board determined that he had communicated misleading information to a client when he misrepresented the value of the client's account by co-mingling his own funds with the client's funds; and
Eric D. Kallies, of Fitchburg, Wis., for giving investors a PowerPoint presentation that was misleading due to omissions and misrepresentations of material facts and for failing to obtain prior approval from Finra.
The Board also suspended the CFP certifications of Stephen M. Rice, Los Gatos, Calif.; Rex D. Foster, East Lansing, Mich.; William V. Canale II, of Niskayuna, N.Y.; and Roger D. Stevenson of San Benito, Texas. The Board also issued an interim suspension to Martha J.C. Hawk, of Blountville, Tenn.
The Board also issued letters of admonition to Martin T. Streetman, Castle Rock, Colo.; Kyle Egress, West Hartford, Conn.; Christopher F. Wendland, Fort Myers, Fla.; Miyoung Yook, Northbrook, Ill.; Deborah D. Carter, Las Vegas, Nev.; Michael P. Dunham, Oklahoma City, Okla.; David L. Rhodes, Bryan Texas; Jacqueline Hanson, Waterford, Va.; and Craig M. Siminski, Green Bay, Wis.