The Certified Financial Planner Board of Standards Inc. has issued an order permanently revoking financial planner Victor Lee’s right to use the CFP certification marks.
The CFP Board’s Disciplinary and Ethics Commission issued the order stripping Lee, a resident of Bayside, N.Y., of his professional certification after being terminated by his firm for failing to disclose an outside business activity.
Lee had entered into a Letter of Acceptance, Waiver, and Consent (AWC) with the Financial Industry Regulatory Authority (Finra), consenting to a permanent bar after Finra found he engaged in an undisclosed business activity; created at least 50 partnership agreements whereby he affixed inaccurate information to them; and failed to conduct due diligence in drafting the partnership agreements.
According to Finra’s BrokerCheck website, Lee reportedly engaged in a reciprocal business arrangement with a local tax preparer, who referred clients to Lee.
Lee not only was charged with failing to disclose the unapproved business arrangement to his employer, UBS Financial Services Inc. of New York, N.Y., he allegedly used the firm’s resources, including his business email address, to communicate with clients referred to him by the tax preparer, BrokerCheck said. Since UBS did not know of the business arrangement, it had not approved it.
Additionally, Lee reportedly entered into backdated partnership agreements with the tax preparer’s clients when he believed they were under audit by the New York State Department of Tax and Finance, even though he had no prior experience or expertise in creating partnership agreements.
Lee knowingly drafted false and misleading documents the tax preparer’s clients filed with the state while under audit, misrepresenting Lee’s employer, UBS, which had not sanctioned his actions, and state auditors, which reviewed them, according to BrokerCheck.
The CFP Board found that Lee failed to disclose his Finra bar to the board, as required by the Disciplinary Rules and Procedures that govern the industry, thereby violating the Rules of Conduct.
The CFP Board revocation is effective as of September 27, 2018, but the Finra revocation is effective as of January 9, 2017.
Lee worked for UBS from September 20, 2012 through December 24, 2015.
In addition to taking disciplinary action against Lee, the CFP Board suspended three financial planners from using its certification marks.
The CFP Board suspended James Keith Cox of Baton Rouge, La., from using its certification marks for one year and one day, effective October 29, 2018 through October 30, 2019, after Finra issued an acceptance, waiver and consent letter with Cox after finding he recommended several annuity transactions in 2014 to one client without a reasonable basis; engaged in an outside business activity with the same client without providing prior written notice to his firm; and made several unsuitable recommendations to a client from which Cox profited by pocketing a commission of more than $25,000.
Cox consented to a four-month Finra suspension based on a more recent charge of unsuitability, but failed to notify the CFP Board of Finra’s action as required.
The CFP Board suspended Richard D. LaSpaluto of Las Vegas, Nev., from using its certification marks for one year and one day, from October 29, 2018 to October 30, 2019. The board took the action after its Disciplinary and Ethics Commission found that between 2008 and 2016, LaSpaluto fell behind on the taxes he owed the IRS. As a result, the IRS filed a $91,603.84 tax lien against LaSpaluto in 2016.
Although LaSpaluto knew of the lien by 2017, he knowingly failed to notify the CFP Board as required and did not adequately respond to requests for further information by the CFP Board staff looking into the matter, the board said.
The CFP Board suspended Jaime Page Nelson of New York, N.Y., from using its certification marks for six months, from October 29, 2018 to April 29, 2019. The board took the action after Nelson reportedly misrepresented her completion of the board’s Continuing Education (CE) credit hours.
The CFP Board also issued three Letters of Admonition to the planners Richard D. Holdway, CFP, of Palm Springs, Calif.; Anne Marie C. Albertine, CFP, of Bethesda, Md.; and Rick M. Higgins, CFP, of Spartanburg, S.C.
In September 2016, the CFP Board received a complaint letter alleging that Holdway, a 28-year employee of Ameriprise Financial Services Inc. since 1990, and a subordinate were serving as beneficiaries, trustees and powers of attorney for numerous clients in violation of firm policy.
After a hearing, the board’s Disciplinary and Ethics Commission found that Holdway had failed to adequately supervise a subordinate. As a result, the subordinate was named as a beneficiary in several client accounts.
In addition, Holdway was named a fiduciary of several client accounts, without prior firm approval.
As a result of his conduct, Ameriprise issued a Letter of Reprimand to Holdway and Finraissued a Letter of Caution. Upon finding that Holdway had violated its Rules of Conduct, the CFP Board issued a Letter of Admonition to him as well.
The CFP Board issued a Letter of Admonition to Albertine based on actions dating back to 2010. At that time, Albertine and her husband reportedly suffered a decline in the value of their home, as well as business setbacks leading to difficulties making tax payments to the IRS.
The couple reached an agreement with the IRS to pay their outstanding taxes on a month-to-month basis. In 2014, Albertine and her husband liquidated assets to make the tax payments. By 2016, however, the couple still owed the IRS a total of $163,502.86, which the commission found was a violation of the board’s Rules of Conduct.
Albertine appealed the commission’s December 2017 decision, but the board’s Appeals Committee affirmed it.
Higgins received a Letter of Admonition based on an order issued by the CFP Board’s Disciplinary and Ethics Commission dating back to actions taken by Higgins in 2016. At that time, Higgins’ employer, ProEquities Inc., terminated his employment for having clients sign blank switch letters and acknowledgement forms. Higgins entered into an AWC Letter with Finra, in which he consented to the findings that he maintained customer-signed, but otherwise blank forms for approximately 130 clients, which he submitted to the firm upon the execution of relevant transactions.
The CFP Board found that Higgins’ actions violated its Rules of Conduct, and issued a Letter of Admonition to him.