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Certification Updates

CFP Board's Board of Appeals Reviews Board of Professional Review Disciplines

Jan 12, 2003
Certified Financial Planner Board of Standards' Board of Appeals reviewed six appeal petitions at hearings on September 17-18. Of the six cases, the Board of Appeals affirmed the discipline imposed by CFP Board's Board of Professional Review in three cases, decreased the discipline in two cases and remanded one case back to the Board of Professional Review for further proceedings. Summaries of the cases in which discipline was imposed are set forth below.

CALIFORNIA
Brett S. Ellen (Westlake Village): In a June 2001 hearing, CFP Board's Board of Professional Review found that Mr. Ellen had engaged in conduct in violation of the Code of Ethics and Professional Responsibility. Based on these findings, the Board of Professional Review determined to permanently revoke Mr. Ellen's rights to use the CFP marks. Mr. Ellen filed a petition appealing that decision and, on Sept. 17, 2002, an appeal hearing was conducted. Although the Board of Appeals affirmed some of the Board of Professional Review's findings of fact, namely that Mr. Ellen made a number of misrepresentations regarding investments to a client and failed to disclose his involvement in a 1999 NASD arbitration to CFP Board as required, it found clear error with respect to several other findings of fact. The Board of Appeals also considered the fact that Mr. Ellen had previously been disciplined by CFP Board, receiving a public Letter of Admonition in 1999. Based on its review of the case, the Board of Appeals determined to decrease the discipline imposed by the Board of Professional Review from a permanent revocation to a two-year suspension of Mr. Ellen's right to use the CFP marks.

Rollo Richard Norton II (San Diego): In a March 2002 hearing, CFP Board's Board of Professional Review found that Mr. Norton had engaged in conduct in violation of the Code of Ethics and Professional Responsibility. Based on these findings, the Board of Professional Review determined to permanently revoke Mr. Norton's rights to use the CFP marks. Mr. Norton timely filed a petition appealing that decision and, on Sept. 17, 2002, an appeal hearing was conducted. Although the Board of Appeals affirmed some of the Board of Professional Review's findings of fact, namely that (a) as president of a nonprofit corporation, Mr. Norton failed to ensure that the corporation provided the services it claimed to provide, and (b) Mr. Norton failed to disclose that he was the subject of a 1997 inquiry by the California Attorney General's Office to CFP Board as required, the Board of Appeals found clear error with respect to several other findings of fact. Accordingly, the Board of Appeals determined to decrease the discipline imposed by the Board of Professional Review from a permanent revocation to a three-year suspension of Mr. Norton's right to use the CFP marks.

FLORIDA
Carol M. Allen (Deland): In an April 2002 hearing, CFP Board's Board of Professional Review found that Ms. Allen had engaged in conduct in violation of the Code of Ethics and Professional Responsibility. Based on these findings, the Board of Professional Review determined to permanently revoke Ms. Allen's right to use the CFP certification marks. Ms. Allen filed a petition appealing the Board of Professional Review's decision and, on Sept. 18, 2002, a hearing was conducted. The Board of Appeals affirmed a number of the Board of Professional Review's findings, including that Ms. Allen had entered into a consent order with the Florida Department of Banking and Finance, in 2000, wherein she consented to a number of findings, such as that she failed to properly supervise a subordinate, permitted her company to sell securities when the company was not registered, improperly referred to herself as a registered investment advisor and failed to maintain proper books and records, among other findings. Additionally, the Board of Appeals affirmed the finding by the Board of Professional Review that, pursuant to the consent order, Ms. Allen paid $50,000 in administrative costs and agreed not to be affiliated with any broker/dealer in Florida for at least five years. The Board of Appeals also affirmed the finding of the Board of Professional Review that Ms. Allen failed to disclose as required that in 1992 she was arrested and charged with felony concealment of a weapon in an airport for which she was placed on six-months probation and ordered to complete 100 hours of community service and that she also failed to disclose as required her involvement in three NASD arbitrations filed between 1999 and 2001. Finally, the Board of Appeals affirmed the Board of Professional Review's findings that Ms. Allen did not recognize her responsibilities in her business dealings and was offering advice to clients in areas in which she was not qualified, specifically investments. Although the Board of Appeals found clear error with respect to several other findings of the Board of Professional Review, it concluded that the error was not material and, therefore, affirmed the Board of Professional Review's decision to permanently revoke Ms. Allen's right to use the CFP marks.

T. "Jerry" Royer (Altamonte Springs): In March 2002, after receiving a grievance from the daughter of one of Mr. Royer's clients regarding the professional services he provided her mother and after conducting a hearing on the matter, CFP Board's Board of Professional Review issued a decision suspending Mr. Royer's right to use the CFP marks for one year and one day. The decision was based, in part, on findings that Mr. Royer: (a) failed to calculate the cost basis for his client's annuities but told the client that there would be a taxable event, and (b) did not know what strategy would be best because he did not know his client's situation. In aggravation, the Board of Professional Review considered that it appeared Mr. Royer did not believe he had any responsibility to answer to CFP Board and that he did not appear to be fully aware of theprocedures utilized in his office. Mr. Royer filed a petition appealing the decision and, on Sept. 17, 2002, a hearing was conducted. At the conclusion of the hearing, the Board of Appeals affirmed the Board of Professional Review's findings of fact and the suspension of Mr. Royer's right to use the CFP marks for one year and one day.

MISSOURI
Michael G. Grimes (St. Louis): In a November 2001 hearing, CFP Board's Board of Professional Review found that Mr. Grimes had engaged in conduct in violation of the Code of Ethics and Professional Responsibility. Specifically, the Board of Professional Review found, among other things, that Mr. Grimes: (a) was the subject of an NASD 30-day suspension and $30,000 fine and a $25,000 fine by his state's securities commission, (b) misrepresented authorship of a book, (c) failed to realize that CFP Board and the College for Financial Planning are two separate and distinct organizations, (d) engaged in a pattern of misrepresentation, made unsuitable recommendations, and failed to disclose material facts and the risks associated with certain investments, (e) based his recommendations to a variety of clients on information obtained from a single source and accepted those recommendations at face value, (f) recommended other brokers in his office to clients without doing appropriate review of their capabilities, while sharing 50 percent of all commissions; and (g) failed to disclose several matters to CFP Board as required. Based on these findings, the Board of Professional Review determined to permanently revoke Mr. Grimes' rights to use the CFP marks. Mr. Grimes filed a petition appealing that decision and, on Sept. 17, 2002, a hearing was conducted. After the hearing, the Board of Appeals affirmed the findings above. Although the Board of Appeals found clear error with respect to a couple of the Board of Professional Review's other findings of fact, it determined that the error was not material and, therefore, affirmed the Board of Professional Review's decision to permanently revoke Mr. Grimes' right to use of the CFP certification marks.

An independent certifying organization, the CFP Board owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™ and , and grants individuals who meet its initial and ongoing certification requirements the right to use them.

Decisions to revoke, suspend or otherwise control the right to use CFP Board's trademarks may be made by the Board of Professional Review, a Board of CFP® certificants that interprets and applies CFP Board's Code of Ethics and Professional Responsibility and Financial Planning Practice Standards, as well as investigates, deliberates and takes appropriate action with respect to alleged violations of the Code of Ethics or Practice Standards by CFP certificants.

An individual found in violation of CFP Board's Code of Ethics or Practice Standards by the Board of Professional Review has the right to appeal that decision to the Board of Appeals, and seek a reversal or modification of the decision made, or a correction of adverse findings or rulings by the Board of Professional Review. The Board of Appeals is composed of four members of the Board of Governors. A member of the Board of Professional Review may not serve concurrently on the Board of Appeals.

CFP Board is a nonprofit certifying organization founded in 1985 to benefit the public by fostering professional standards in personal financial planning. Since 1987, CFP Board has publicly disciplined 418 individuals using the marks CFP®, CERTIFIED FINANCIAL PLANNER™. As of Nov. 30, 2002, there were 40,387 individuals authorized to use these marks in the United States.

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