The Certified Financial Planner Board of Standards, which issues the prestigious Certified Financial Planner (CFP) designation, announced in a press release to PR Newswire on August 5, 2019, that they had sanctioned 12 financial planners for violating FINRA rules or the CFP Code of Conduct. Violations include failing to disclose outside business activities and selling away. The sanctions include:

  • Letters of admonition
  • Suspensions
  • Permanent revocations

CFP Board of Standards
This press release comes just days after the Wall Street Journal wrote a scathing exposé of The CFP Board of Standards’ alleged failure to screen their financial planners for FINRA disclosures. In one instance, a certified financial planner had been convicted of possessing child pornography. In another, a financial planner was sent to pretrial diversion after making violent threats.

Name Location Penalty Reason for Penalty
Blanche S. Berenzweig Las Vegas, Nevada administrative revocation “in 2016, Mr. Croxton altered a client form without his client’s knowledge and consent. … the Financial Industry Regulatory Authority, Inc. (FINRA) found that Mr. Croxton’s conduct violated FINRA Rule 2010 for alteration of a customer document without the customer’s knowledge or authorization and issued a Cautionary Action Letter to Mr. Croxton.”
Walter Chao San Mateo, California one year and one day suspension (cannot use the CFP® designation from May 28, 2019 to May 29, 2020) endorsed private securities transactions unapproved by his firm (“selling away”)
Carla Chastain Rogers, Arkansas two-year suspension (cannot use the CFP® designation from June 28, 2019 through June 28, 2021) “she stated in 2016 that she was an investment adviser representative when she was not and that she had earned the professional designation ‘IRA Distribution Specialist’ from a firm that does not offer such a designation. … Ms. Chastain had been barred from registration as an investment adviser in Arkansas in 2016 for ten years … which she failed to report to CFP Board within 30 calendar days.”
Brandon Croxton Baltimore, Maryland letter of admonition altered a client form, violating FINRA Rule 2010
Lloyd Dotson Pawley’s Island, South Carolina administrative revocation Failed to file an answer to CFP Board’s complaint; entered into an AWC and was barred from the securities industry by FINRA
Scott F. Goldman Arlington Heights, Illinois six-month suspension (cannot use the CFP® designation from June 28, 2019 through December 28, 2019) recommended unsuitable investments in precious metals; entered into an AWC with FINRA
King S. Lip San Francisco, California One-year suspension (cannot use the CFP® designation from May 28n 2019 to May 28, 2020) could not prove that he completed required continuing education courses
Aon Miller Chattanooga, Tennessee one-year suspension (cannot use the CFP® designation from July 17, 2019 to July 17. 2020) failed to disclose outside business activities
Monica B. Philip Milwaukee, Wisconsin administrative revocation (effective March 27, 2019) failed to file an answer for a complaint, failed to disclose outside business activities
Jason Robert Piepmeier Plantation, Florida six-month suspension (cannot use the CFP® designation from May 28, 2019 to November 28, 2019) could not prove that he had completed continuing education courses
Kitwana Thomas Jacksonville, Florida five-year suspension (cannot use the CFP® designation from June 25, 2019 until June 25, 2024) “in 2016, he converted his firm’s funds by obtaining reimbursement for computer equipment to which he was not entitled pursuant to his firm’s reimbursement program and also counseled another employee to lie in a firm investigation”, barred from the securities industry by FINRA
Steve Weinberger Los Angeles, California two-year suspension (cannot use the CFP® designation from July 5, 2019 to July 5, 2021) “failed to schedule annual portfolio reviews with his client to consider whether her current holdings matched her current priorities; failed to update his client’s portfolio based upon her changed circumstances after she lost her job, became ill, and/or grew increasingly closer to retirement; in one day in 2015, sold stocks that required his client to pay capital gains taxes without informing her about the potential tax liability and after a long period of no or little communication”

 
The recent revelation that many Certified Financial Planners listed on the CFP Board of Standards’ consumer-facing searchable database, LetsMakeAPlan.org, have FINRA disclosures is certainly unsettling to investors and consumers. Your relationship with your financial planner is built on trust, and when that trust is shattered, it can be hard to know what to do next. With the help of an independent task force, the CFP Board of Standards is in the process of weeding out unsavory financial planners and retooling its regulatory procedures. A new CFP Code of Conduct goes into effect in October 2019 and will require all CFPs to act as fiduciaries, putting their clients’ interests ahead of their own. Even so, there is still considerable work to be done. If you have questions about your broker or financial advisor, don’t hesitate to contact the experienced securities attorneys of Fitapelli Kurta. Call (877) 238-4175 or email info@fkesq.com.