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Certification Updates

CFP Board Censures Improper CFP® Certificant Conduct

Jun 01, 2006
Certified Financial Planner Board of Standards Inc. today announced public disciplinary actions against the following individuals' rights to use the CFP® certification marks, effective immediately.
STATE NAME LOCATION DISCIPLINE
Arkansas Carla L. Chastain Rogers Suspension
California Ralph C. Williams Lancaster Letter of Admonition
Colorado Bruce L. Fleet Greenwood Village Revocation
  William Alan Gay Greenwood Village Interim Suspension
New York James J. Reilly Mamaroneck Suspension
Ohio Richard A. Daniels Chagrin Falls Interim Suspension
Darrel E. DeMarco Tallmadge Revocation
Texas Kyle Holland Austin Suspension
Solomon O. Onita Houston Revocation
Utah Michael C. Hirschi Sandy Suspension
Washington David A. Duryee Seattle Suspension

Public disciplinary actions taken by CFP Board, in order of decreasing severity, include permanent revocation, suspension and letters of admonition. Under terms of the revocations, Bruce L. Fleet, Darrel E. DeMarco and Solomon O. Onita no longer have the right to use the CFP® certification marks. The rights of James J. Reilly and Kyle Holland to use the CFP® certification marks were suspended for one year and one day, the right of Carla L. Chastain to use the CFP® certification marks was suspended for one year, and the rights of Michael C. Hirschi and David A. Duryee were suspended for three months. The rights of Richard A. Daniels and William Alan Gay to use the CFP® certification marks were suspended on an interim basis during CFP Board's investigation. CFP Board issued a letter of admonition to Ralph C. Williams; he retains the right to use the CFP® certification marks.

The basis for each decision can be found in the report below. Consumers can check on a planner's disciplinary history and certification status with CFP Board on the Web site.

DISCIPLINARY ACTION REPORT
January 2006

Public Letter of Admonition

CALIFORNIA

Ralph C. Williams (Lancaster): In July 2005, CFP Board issued a Letter of Admonition to Mr. Williams after the Board of Professional Review (Board) found that Mr. Williams' broker/dealer paid his client $40,000 in settlement of his claims against Mr. Williams and the company, to which Mr. Williams was required to personally contribute $5,000. The Board also found that Mr. Williams engaged in unauthorized transactions that resulted in the client's losses and that Mr. Williams was terminated by his broker/dealer for violating firm policy when he engaged in the unauthorized transactions. The Board determined to publish the letter of admonition only after Mr. Williams successfully passed the CFP® Certification Examination and completed six additional continuing education credits, which Mr. Williams did in May 2006.

Suspensions

ARKANSAS

Carla L. Chastain (Rogers): In April 2006, CFP Board suspended Ms. Chastain's right to use the CFP® certification marks for one year, effective from April 21, 2006 through April 21, 2007. After a hearing, the Board of Professional Review found that Ms. Chastain entered into a Consent Order with the Arkansas Securities Department that included conclusions of law stating that she: 1) willfully recommended to various clients the purchase, sale or exchange of securities when she did not have reasonable grounds for believing the transactions were suitable for the clients on the basis of information disclosed by the clients regarding their investment objectives, financial situations and needs; and 2) willfully induced trading in various clients' accounts that was excessive in size and frequency in view of the clients' financial resources, investment objectives and character of their accounts. Pursuant to the Consent Order, Ms. Chastain's Investment Advisor Registration was revoked, her registration as an Agent was suspended for 180 days, she was required to retake the Series 7 examination, and she was fined $100,000.

COLORADO

William Alan Gay (Greenwood Village): In March 2006, CFP Board issued an Order of Interim Suspension to Mr. Gay with respect to his December 2005 indictment on four felony counts, including theft from an at-risk victim, conspiracy to commit theft from an at-risk victim, securities fraud through an untrue statement or omission, and conspiracy to commit securities fraud through an untrue statement or omission. Due to the seriousness of the matter and the related media publicity, in January 2006, CFP Board issued Mr. Gay an Order to Show Cause requiring him to provide evidence why his right to use the CFP® certification marks should not be suspended during CFP Board's investigation. After a hearing, the Board of Professional Review determined that Mr. Gay failed to provide sufficient evidence that his right to use the CFP® certification marks should not be suspended, and accordingly, his right to use the CFP® certification marks was suspended immediately, until further notice.

NEW YORK

James J. Reilly (Mamaroneck): In April 2006, Mr. Reilly entered into a settlement agreement with CFP Board, pursuant to which he consented to a finding that he failed to disclose his involvement in eight arbitrations on his Certification Renewal Application, in violation of CFP Board's Code of Ethics and Professional Responsibility. Mr. Reilly consented to a suspension of his right to use the CFP® certification marks for one year and one day, effective from April 11, 2006 through April 12, 2007.

OHIO

Richard A. Daniels (Chagrin Falls): In May 2006, CFP Board issued an Order of Interim Suspension to Mr. Daniels with respect to his February 2006 suspension by the Ohio Division of Securities and his March 2006 indictment on one felony count of securities fraud. Both incidents related to his alleged misappropriation of approximately $2 million from several of his clients by placing the clients' funds in a corporate checking account he controlled and then using the funds for his own purpose. Due to the seriousness of the matter and the related media publicity, in April 2006, CFP Board issued Mr. Daniels an Order to Show Cause requiring him to provide evidence why his right to use the CFP® certification marks should not be suspended during CFP Board's investigation. Mr. Daniels failed to respond to the Order within the required time frame, and accordingly, his right to use the CFP® certification marks was suspended immediately, until further notice.

TEXAS

Kyle Holland (Austin): In April 2006, CFP Board suspended Mr. Holland's right to use the CFP® certification marks for one year and one day, effective from April 22, 2006 through April 23, 2007. After a hearing, the Board of Professional Review found that Mr. Holland entered into a Letter of Acceptance, Waiver and Consent with NASD, wherein he consented to the entry of findings that 1) Mr. Holland was the Chief Financial Officer for an NASD member firm; 2) a bank president presented a “cashier's check” for $2.8 million to the firm appearing to be drawn on a domestic bank account but also indicating that the bank maintained an office offshore; 3) the bank president withdrew $901,654 from the firm account and transferred those funds to third parties; 4) the $2,800,000 check was returned and the customer's account maintained an unsecured debit balance of $835,537; 5) the firm entered into a settlement agreement with its clearing house, wherein the clearing house agreed to take responsibility for the customer's unsecured debit balance and the firm agreed to pay the clearing house an additional $500,000 in check clearing fees payable over five years; 6) he failed to ensure that the firm included the $500,000 settlement as a liability of the firm; 7) he filed inaccurate reports with NASD because such reports significantly overstated the firm's net capital position and failed to give NASD notice of the firm's net capital deficiencies; and 8) he engaged in private securities transactions for which he earned commissions and failed to give his firm prior notice of these transactions. Mr. Holland consented to the imposition a fine of $25,000 and a suspension from association with any NASD member in all capacities for one month and in any principal capacity for three months.

UTAH

Michael C. Hirschi (Sandy): In April 2006, Mr. Hirschi entered into a settlement agreement with CFP Board, pursuant to which he consented to a finding that he violated CFP Board's Code of Ethics and Professional Responsibility by permitting an employee to conceal documents from internal inspectors during an internal review. Mr. Hirschi consented to a three-month suspension of his right to use the CFP® certification marks, effective from April 24, 2006 through July 24, 2006.

WASHINGTON

David A. Duryee (Seattle): In March, 2006, Mr. Duryee entered into a settlement agreement with CFP Board, pursuant to which he consented to findings that he failed to exercise proper diligence over an extended period of time and failed to keep CFP Board informed of the details of a settlement as required, in violation of CFP Board’s Code of Ethics and Professional Responsibility. Mr. Duryee consented to a three-month suspension of his right to use the CFP® certification marks, effective from March 31, 2006 through June 30, 2006.

Revocations

COLORADO

Bruce L. Fleet (Greenwood Village): In May 2006, CFP Board permanently revoked Mr. Fleet's right to use the CFP® certification marks. After a hearing, the Board of Professional Review found that Mr. Fleet 1) inappropriately invested his client's charitable lead annuity trusts in B shares rather than less costly A shares; 2) entered into a Letter of Acceptance, Waiver and Consent with NASD wherein he agreed to accept findings that he recommended that the client purchase mutual fund B shares, even though A shares would have given greater economic benefit, and wherein he consented to a 20 day suspension from association with any NASD member and a $5,000 fine; 3) used the CFP® marks from 1992 through 2004 while he was not certified and not authorized to use the marks; and 4) failed to comply with CFP Board's renewal requirements and continued to hold himself out to the public as a CERTIFIED FINANCIAL PLANNER™ professional. Mr. Fleet appealed the Board of Professional Review's findings; however, after a review of the record, Mr. Fleet's petition for appeal and CFP Board's response thereto, the Board of Appeals determined to affirm the findings and the discipline imposed.

OHIO

Darrel E. DeMarco (Tallmadge): In March 2006, CFP Board permanently revoked Mr. DeMarco's right to use the CFP® certification marks after he failed to respond to CFP Board's Complaint investigating a Letter of Acceptance, Waiver and Consent (AWC) he entered into with NASD wherein Mr. DeMarco consented to findings that he forged the name of an official of his member firm on a corporate resolution guaranteeing that the firm would stand behind automobile loans and leases entered into by an automobile dealership with professional athletes Mr. DeMarco hoped to attract as customers. As part of the AWC, Mr. DeMarco also consented to findings that he signed the corporate resolution without the knowledge, consent or authorization of his firm or the firm's official whose purported signature appeared on the resolution. Pursuant to the AWC, Mr. DeMarco was barred from association with any NASD member in any capacity. Because Mr. DeMarco failed to respond to CFP Board's Complaint, the allegations in the Complaint were deemed admitted and an order of revocation was issued.

TEXAS

James S. Quay (Atlanta): In January 2006, CFP Board permanently revoked Mr. Quay's right to use the CFP certification marks pursuant to a settlement agreement wherein Mr. Quay consented to findings that he violated CFP Board's Code of Ethics and Professional Responsibility when he failed to disclose his involvement in civil actions and governmental inquiries related to his sale of viaticals in 1996 and 1997.

NEW YORK

Solomon O. Onita (Houston): In January 2006, CFP Board permanently revoked Mr. Onita's right to use the CFP® certification marks after he failed to respond to CFP Board's Complaint investigating his unauthorized use of the CFP® certification marks for at least two years after his certification expired. Because Mr. Onita failed to respond to CFP Board's Complaint, the allegations in the Complaint were deemed admitted and an order of revocation was issued.

The mission of Certified Financial Planner Board of Standards Inc. is to help people benefit from competent, professional and ethical financial planning. CFP Board owns the certification marks CFP® , CERTIFIED FINANCIAL PLANNER™ and federally registered CFP (with flame logo) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements. CFP Board currently authorizes more than 51,000 individuals to use these marks in the United States. 

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