CFP Board Takes Action Against 23 Advisors
Alleging an array of unethical practices, the CFP Board has censured almost two dozen advisors across the country, permanently revoking the CFP marks for three of them.
Another 13 were suspended and seven were publicly admonished for technical infractions.
The three advisors whose designations were revoked are as follows; none of the three returned phone calls seeking comment.
- Joseph M. Browne with Summit Wealth Partners in Jacksonville Beach, Fla. Browne misrepresented his compensation method on the CFP Board's "Find a CFP Professional" search tool, the CFP Board said. According to FINRA Broker Check records, Browne had one customer dispute filed against him regarding fee disclosure, which he settled for $10,500 in September 2000.
- Michael T. Sullivan with First Allied Securities in Mooresville, N.C. Sullivan's CFP designation was stripped for a number of actions, the organization said, including recommending and selling annuities that were unsuitable. Sullivan, last based in Mooresville, N.C., did not return a call for comment.
- Michael A. Zolondek, who last was employed by Princor Financial Services in Mauston, Wis. According to the CFP, Zolondek was permanently barred by FINRA helping approximately 300 Farmers Financial Solutions employees cheat on Life Underwriter Training Course exams, among several other infractions.
The CFP board also handed down several suspensions of varying length.
- Scott A. Brooks, an advisor with an Ameriprise Financial branch in Edgewood, Ky., lost the right to use his CFP certification marks for one year after the board found he failed to file for federal income tax returns or pay income taxes for a 10-year period from 2000 to 2009, resulting in tax liens totaling nearly $1 million. Brooks also failed to file state income taxes from 2000 through 2008, resulting in a state tax lien in excess of $100,000, the board said. The board also said that Brooks did not make timely updates to his Form U4 to report these liens. A firm spokeswoman said Brooks was unavailable for comment.
- Brett Fellows, managing member of Oak Capital Advisors in Mount Pleasant, S.C., misled clients into transferring their accounts to a new broker-dealer by sending letters indicating that the reason for them to sign the enclosed forms was purely administrative, according to the CFP Board. His right to use the CFP certification marks was suspended for just over one year; Fellows did not return a call seeking comment.
- Roy Dwane Johnson, of Ajz Consulting in Raceland, Ky., had his CFP certification suspended for four years; the Board said he misappropriating funds and submitting false records to his member firm regarding reimbursement claims for personal expenses during a five-year time period. Johnson was unavailable for comment.
- Candy J. Lee, CEO of Candy J. Lee Financial Planning and Money Management in Seattle, sold C-shares to her clients as a means of ensuring payment for her advisory services, the CFP Board said. The board suspended her right to use the CFP certification marks for nine months. Lee did not return a call for comment.
- Robert A. Magliulo, with Vanderbilt Securities in Woodbury, N.Y., was suspended for six months. The CFP Board said it reached a settlement with Magliulo in which he consented to CFP Board's finding that he improperly instructed his sales assistant to complete an online continuing education program on his behalf, in violation of FINRA rules. Magliulo did not return a call for comment.
- Kevin M. Nevin of Sandlapper Wealth Management in St. Louis Park, Minn., lost his right to use the CFP certification for one year, beginning in November 2014, after acknowledged failing to give his firm prior written notice of his clients' intended investments in three private placements, the organization said. As a result, the firm did not record any of those transactions and did not supervise his activity. A call left at his office was not returned.
- Charles E. O'Hara IV, of Investors Capital in Newport, R.I., was suspended for just over a year; the CFP Board said he recommended and sold $400,000 in REITs and partnership interests to a client, solicited personal loans from clients and borrowed $14,650 from clients in 2008, failing to disclose the loans. He did not return a call for comment.
- Swan S. Shen, of Holistic Financial & Retirement Group in Burlington, Mass., reached a settlement with the CFP Board for a six month suspension for three infractions, the CFP Board said. Shen altered a client's variable annuity checklist by adding feeds to the signed form; copied and pasted non-genuine signatures of four separate customers on three documents without the customers' knowledge or consent, presenting the documents as originals for processing; and consolidated customer statements that were then provided to certain clients without firm pre-approval, according to the Board's announcement. Shen declined to comment.
- Jacqueline H. Thornhill of Las Vegas lost her right to use the CFP designation by the board for three months beginning in November 2014. She had failed to report a FINRA suspension to her firm within 30 days, in violation of rules, the Board said. The FINRA violation, which she consented to, was for participating in private securities transactions for compensation without first getting the approval of her firm. Thornhill could not be reached for comment. According to FINRA's website, she is not currently registered with any firm.
The board also issued four interim suspensions. These are issued immediately and without a hearing "when CFP Board Counsel receives evidence of a conviction or a professional discipline [for] revocation of a financial professional license," the Board said in its announcement of the measures. Such suspensions precede a separate CFP Board investigation, which could result in further disciplinary measures, the organization said.
- David L. Gabai , a principal at Spectrum Financial in West Hills, Calif.: The CFP Board said it discovered he entered into a letter of acceptance, wavier and consent with FINRA over findings that he "utilized deceptive, fraudulent and manipulative strategies involving the purchase and sale of a stock of which he held a significant personal stake." Gabai did not return a call for comment.
- F. Christopher Piatt consented to a permanent bar from FINRA after he completed a continuing education course for someone else, then later denied it to FINRA and his firm, the CFP Board said. The Bloomington, Minn.-based Piatt is currently not licensed, and could not to be located for comment.
- Jamie D. Pope, an advisor in Winter Park, Fla., received an interim suspension in November after FINRA permanently barred him for having a client invest $60,000 in Pope's outside business activities -- funds that Pope used for his own purposes, the CFP Board said. Pope did not return a call for comment.
- Ronald W. Vaught, a former Raymond James advisor in Melbourne, Fla., received an automatic interim suspension from the CFP Board last November after the board discovered that FINRA had permanently barred Vaught. FINRA barred Vaught because he failed to notify his firm that a client had named him successor trustee and beneficiary of a client's trust, and was found to have falsified a form that allowed him to transfer all of the trust's assets to his checking account, the CFP Board said. A phone call to Vaught's office was not answered.
The CFP also handed down public admonitions to advisors who made technical errors or failed to report other infractions of the law.
- Sue Ann Appleby, who works for Compass Wealth Services in Belvidere, Ill., agreed to a public letter of admonition; the CFP Board said she allowed her clients to sign incomplete electronic fund transfer forms, violating both firm policies and FINRA's Rule 2010. She did not immediately return a request for comment.
- Jason K. Chepenik, of Chepenik Financial in Winter Park, Fla., was issued a public letter of admonition by the CFP Board in December 2014. The board said Chepenik failed to report several driving-related convictions as required, and that he engaged in investment advisory business in Florida without being properly registered, in violation of Florida statutes. Chepenik did not respond to a request for a comment.
- Phillip C. Coad, an advisor with Vermillion Financial Advisors in South Barrington, Ill., agreed to a public letter of admonition after the board says he misrepresented his compensation on the CFP Board's "Find a CFP Professional" search tool. According to board regulations, "fee-only" can describe a practice if the compensation comes solely from clients in fixed, flat, hourly, percentage or performance-based fees, but the CFP Board said both Coad and his employer received commissions from insurance sales. Coad did not return a request for comment; conflicts over the use of the "fee-only" label were the source of past problems for the CFP Board.
- The CFP Board issued Duncan C. DeWahl, at Delta Capital Management in Maitland, Fla., a public letter of admonition in December 2014, after he consented to the findings that he had signed the names of six clients on suitability forms and failed to report his FINRA suspension to the CFP Board. He did not return a request for comment.
- Darin Gibson, president of the Burnham Gibson Financial Group in Irvine, Calif., received a public letter of admonition for discrepancies between the services agreed to in a client agreement and those provided, the CFP Board said. His certification is currently lapsed; Gibson said he had no comment on the matter.
- Mark E. Rauguth, a financial consultant at Immaculate Wealth Management in Mesa, Ariz., received a public letter of admonition from the CFP Board for improperly using his broker-dealer's signature guarantee stamp for non-firm customers and failing to maintain photocopies of the guaranteed documents, the CFP Board said. Rauguth settled with the CFP Board and received a suspension and fine from FINRA. He did not return a call seeking comment.
- Don G. Stamas, founding partner of Defender Capital in Charlotte, N.C., incorrectly represented his compensation method as "fee only" because he received commissions for selling insurance products, the CFP Board said. He received a public letter of admonition. "I am very disappointed in how this entire process was handled," Stamas said.