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CFP Board Censures Improper CFP® Certificant Conduct

Mar 25, 2010

Washington DC, March 25, 2010 — Certified Financial Planner Board of Standards, Inc. announces public disciplinary actions against the following individuals’ right to use the CFP® certification marks, effective immediately.

STATE NAME LOCATION DISCIPLINE
Connecticut Dr. Edwin A. Toth Chesire Letter of Admonition
Florida Christopher V. Eardley Ocala Denial of Certification
Illinois George E. Arocha Bourbannais Letter of Admonition
Indiana Daniel E. Brunette Indianapolis Suspension
Kentucky Lee C. Helmers Lexington Suspension
Michigan Anthony Agbay Bloomfield Hills Suspension
New Jersey Kevin R. Johnson Princeton Revocation
New York Steven P. Cariati Slingerlands Letter of Admonition
Ohio Michael C. Brady Olmstead Falls Suspension
Oregon Shawn P. Gergen Eugene Letter of Admonition
Texas Noor Amirali Houston Suspension
  Daniel P. Hensley San Antonio Suspension
Wisconsin Derek McSherry Lake Geneva Revocation

Public disciplinary actions taken by CFP Board, in order of increasing severity, include letters of admonition, suspensions and permanent revocations. The basis for each decision can be found on CFP Board’s Web site, and consumers may check on any planner’s disciplinary history and certification status with CFP Board at www.CFP.net/search.

CFP Board’s Standards of Professional Conduct, which includes the Code of Ethics and Professional Responsibility, Rules of Conduct and Financial Planning Practice Standards, sets forth the ethical standards for financial planners who hold the CFP® certification. CFP Board enforces its ethical standards by investigating incidents of alleged unethical behavior, and following the procedures established in CFP Board’s Disciplinary Rules and Procedures. In cases where violations are found, CFP Board may impose discipline ranging from a private censure or public letter of admonition to the suspension or revocation of the right to use the CFP® marks. The Disciplinary Rules and Procedures set forth a fair process for investigating matters and imposing discipline where necessary.

CFP Board’s enforcement process is a critical consumer protection. CFP® practitioners agree to abide by CFP Board’s Standards of Professional Conduct, which sets forth their ethical responsibilities to the public, clients and employers. CFP® practitioners agree to act fairly and diligently when providing clients with financial planning advice and services, putting the clients’ interests first.

The mission of Certified Financial Planner Board of Standards, Inc. is to benefit the public by granting the CFP® certification and upholding it as the recognized standard of excellence for personal financial planning. The Board of Directors, in furthering CFP Board's mission, acts on behalf of the public, CFP® certificants and other stakeholders. CFP Board owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, and the 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 60,000 individuals to use these marks in the U.S.

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DISCIPLINARY ACTION REPORT

Letters of Admonition

CONNECTICUT

Dr. Edwin A. Toth (Cheshire): In November 2009, following a hearing by CFP Board’s Disciplinary and Ethics Commission (“Commission”), CFP Board issued a Letter of Admonition to Mr. Toth. This discipline followed CFP Board’s investigation of two matters: 1) a March 2007 letter of admonishment issued to Mr. Toth by the New York Stock Exchange (“NYSE”); and 2) Mr. Toth’s October 2007 Chapter 13 bankruptcy filing. The NYSE letter of admonishment contained findings that Mr. Toth failed to disclose to his branch office manager several items: 1) Mr. Toth loaned $50,000 to a company; 2) The company gave Mr. Toth 50,000 shares of stock; 3) Mr. Toth returned the shares; and 4) Mr. Toth sent the company a letter explaining why he returned the shares without first submitting the letter for firm approval. NYSE found these actions to be a violation of NYSE Rule 476(a)(6), which prohibits registered representatives from making material misstatements or omissions of fact to member firms. NYSE also found that Mr. Toth provided the company with information about accounts opened for its investors but failed to submit the correspondence for review by his broker dealer as required, thereby violating NYSE Rule 342.16, which requires prior supervisory review for all firm-related correspondence. The Commission determined that Mr. Toth’s conduct violated Rules 102, 406, 606(a), 606(b) and 607 of CFP Board’s Code of Ethics and Professional Responsibility and provided grounds for discipline pursuant to Article 3(a) of CFP Board’s Disciplinary Rules and Procedures. Accordingly, the Commission admonished Mr. Toth with regard to the above-mentioned conduct.

ILLINOIS

George E. Arocha (Bourbonnais): In November 2009, following a hearing by CFP Board’s Disciplinary and Ethics Commission (“Commission”), CFP Board issued a Letter of Admonition to Mr. Arocha. This discipline followed CFP Board’s investigation of a federal tax lien assessed against Mr. Arocha in 2005. The Commission determined that Mr. Arocha failed to pay quarterly estimated federal income taxes, resulting in a $145,708 tax lien. The Commission also determined that Mr. Arocha failed to disclose the tax lien on his CFP® certification renewal application. The Commission found that Mr. Arocha’s conduct violated Rule 607 of CFP Board’s Code of Ethics and Professional Responsibility and provided grounds for discipline pursuant to Article 3(a) of CFP Board’s Disciplinary Rules and Procedures. Accordingly, the Commission admonished Mr. Arocha with regard to the above-mentioned conduct.

NEW YORK

Steven P. Cariati (Slingerlands): In November 2009, following a hearing by CFP Board’s Disciplinary and Ethics Commission (“Commission”), CFP Board issued a Letter of Admonition to Mr. Cariati. This discipline followed CFP Board’s investigation of two related matters: 1) Mr. Cariati entered into a Letter of Acceptance, Waiver, and Consent (“AWC”) with FINRA on March 4, 2008, wherein he agreed to a suspension of his securities registration for 10 business days; and 2) Mr. Cariati failed to report the professional suspension to CFP Board within 10 calendar days. In February 2008, FINRA initiated an investigation into Mr. Cariati’s outside business activities and the compensation he received in connection with those activities. The investigation alleged that Mr. Cariati violated NASD Rules 2110 and 3030 when he prepared, for compensation and without his employer’s knowledge, an analysis of a customer’s financial position with reference to an insurance plan recommended by Mr. Cariati. Mr. Cariati was conducting these activities outside the scope of his employment with a member firm, and did not provide the firm with prompt written notice of the activity. In March 2008, Mr. Cariati entered into an AWC with FINRA that imposed a $5,000.00 fine and suspended Mr. Cariati from association with any FINRA member in any capacity for 10 business days. Mr. Cariati failed to report his suspension to CFP Board within 10 calendar days of notification of the suspension, as required by Article 12.2 of the Disciplinary Rules and Procedures (“Disciplinary Rules”), but he later disclosed it on his CFP® certification renewal application in December 2008, nine months after the suspension became effective. The Commission determined that Mr. Cariati’s conduct violated Rules 406, 606(a), and 606(b) of CFP Board’s Code of Ethics and Professional Responsibility and provided grounds for discipline pursuant to Articles 3(a) and 3(e) of CFP Board’s Disciplinary Rules. Accordingly, the Commission admonished Mr. Cariati with regard to the above-mentioned conduct.

OREGON

Shawn P. Gergen (Eugene): In November 2009, following a hearing by CFP Board’s Disciplinary and Ethics Commission (“Commission”), CFP Board issued a Letter of Admonition to Mr. Gergen. This discipline followed CFP Board’s investigation of alleged false statements Mr. Gergen made to his supervisor relating to Mr. Gergen’s use of prohibited solicitation materials. In September 2005, Mr. Gergen began using prohibited solicitation materials in presentations to customers. In December 2005, Mr. Gergen’s supervisor asked Mr. Gergen if he was using the prohibited solicitation materials. Mr. Gergen responded that he had not used the prohibited solicitation materials when, in fact, he had used them. Additionally, in his response to the National Association of Securities Dealers, Mr. Gergen misused the CFP® certification marks. The Commission determined that Mr. Gergen’s conduct violated Rules 102, 601, 606(a), 606(b) and 607 of CFP Board’s Code of Ethics and Professional Responsibility and provided grounds for discipline pursuant to Article 3(a) of CFP Board’s Disciplinary Rules and Procedures. Accordingly, the Commission admonished Mr. Gergen with regard to the above-mentioned conduct.

Suspensions

INDIANA

Daniel E. Brunette (Indianapolis): In December 2009, following review by CFP Board’s Appeals Committee, CFP Board issued an order suspending Mr. Brunette’s right to use the CFP® certification marks for one year and one day. In March 2009, following a hearing by CFP Board’s Disciplinary and Ethics Commission (“Commission”), the Commission found that Mr. Brunette failed to clearly describe a product referenced in letters to three of his clients as a variable life insurance policy. The Commission also found that through his misrepresentations of variable life insurance products, Mr. Brunette engaged in a pattern of misconduct that resulted in several customer complaints, lawsuits and arbitrations. As a result of its findings, the Commission determined that Mr. Brunette’s conduct violated Rules 102, 201, 406, 606(a), 606(b) and 607 of CFP Board’s Code of Ethics and Professional Responsibility and provided grounds for discipline pursuant to Article 3(a) of CFP Board’s Disciplinary Rules and Procedures. Mr. Brunette appealed the Commission’s decision to CFP Board’s Appeals Committee. The Appeals Committee affirmed the Commission’s findings of fact and imposed a suspension of one year and one day of Mr. Brunette’s right to use the CFP® marks. Mr. Brunette’s suspension is effective from December 18, 2009 to December 19, 2010.

KENTUCKY

Lee C. Helmers (Lexington): In November 2009, following a hearing by CFP Board’s Disciplinary and Ethics Commission (“Commission”), CFP Board issued an order suspending Mr. Helmers’ right to use the CFP® certification marks for 90 days. This discipline followed CFP Board’s investigation of the following matter: Mr. Helmers was alleged to have identified himself as a CFP® certificant on his firm’s Web site after having relinquished his certification and right to use the CFP® certification marks. The Commission determined that Mr. Helmers: 1) provided clients and prospective clients with false or misleading information about his certification status on his Web site; 2) failed to use the CFP® marks in compliance with the rules and regulations of CFP Board; and 3) engaged in conduct which reflects adversely on his integrity or fitness as a certificant, upon the CFP® marks, and upon the profession. The Commission determined that Mr. Helmers’ conduct violated Rules 2.1, 6.1 and 6.5 of CFP Board’s Rules of Conduct and provided grounds for discipline pursuant to Article 3(a) of CFP Board’s Disciplinary Rules and Procedures. Mr. Helmers’ suspension is effective from December 21, 2009 to March 20, 2010.

MICHIGAN

Anthony Agbay (Bloomfield Hills): In November 2009, following a hearing by CFP Board’s Disciplinary and Ethics Commission (“Commission”), CFP Board issued an order suspending Mr. Agbay’s right to use the CFP® certification marks for three years. This discipline followed CFP Board’s investigation of multiple arbitrations and an order of intent to revoke Mr. Agbay’s Ohio securities license by the Ohio Division of Securities. In May 2008, Mr. Agbay submitted an Initial Application for CFP® Certification on which he disclosed a November 1990 misdemeanor criminal conviction and three National Association of Securities Dealers (“NASD”) arbitrations. CFP Board conducted a background check and discovered a 2007 Ohio Division of Securities regulatory action, another arbitration, and four customer complaints. Arbitrations were filed against Mr. Agbay in August 2001, February 2002, April 2004, July 2005, and February 2009. Three customer complaints were filed against Mr. Agbay in December 2006 and one customer complaint was filed in March 2007. In May 2007, the Ohio Division of Securities found Mr. Agbay in violation of state code, issued an order that suspended Mr. Agbay’s securities license, and stated that the division would issue an order to revoke Mr. Agbay’s securities license in 30 days. Mr. Agbay withdrew his Ohio securities license, and the order was terminated and rescinded. The Commission determined that Mr. Agbay’s conduct violated Rules 606(a) and 607 of CFP Board’s Code of Ethics and Professional Responsibility and provided grounds for discipline pursuant to Article 3(a) of CFP Board’s Disciplinary Rules and Procedures ("Disciplinary Rules"). Accordingly, the Commission issued a three-year suspension of Mr. Agbay’s right to use the CFP® certification marks. The Commission also ordered, as a condition of reinstatement pursuant to Article 4.5 of the Disciplinary Rules, that Mr. Agbay must not be the subject of any new arbitrations or regulatory actions during the suspension period and that Mr. Agbay must complete 45 hours of continuing education, six of which must be on the topic of ethics. Mr. Agbay’s suspension is effective from December 15, 2009 to December 15, 2012.

OHIO

Michael C. Brady (Olmstead Falls): In November 2009, following a hearing by CFP Board’s Disciplinary and Ethics Commission (“Commission”), CFP Board issued an order suspending Michael C. Brady’s right to use the CFP® certification marks for one year. This discipline followed CFP Board’s investigation of a March 2009 grievance filed against Mr. Brady wherein the grievant alleged that from 2006 to 2008, Mr. Brady copied the grievant’s copyrighted materials from a magazine and newsletter without permission or attribution. The Commission found that Mr. Brady portrayed the copyrighted materials as his own, without permission or attribution to the grievant. The Commission determined that Mr. Brady’s conduct violated Rules 101(b), 102 and 607 of CFP Board’s Code of Ethics and Professional Responsibility and provided grounds for discipline pursuant to Article 3(a) of CFP Board’s Disciplinary Rules and Procedures. The Commission considered the following aggravating factors: 1) that the articles were copied verbatim over a span of several years; and 2) that the conduct constituted theft of intellectual property. In mitigation, the Commission considered that no clients were harmed. Mr. Brady’s suspension is effective from December 29, 2009 to December 29, 2010.

TEXAS

Noor Amirali (Houston): In November 2009, following a hearing by CFP Board’s Disciplinary and Ethics Commission (“Commission”), CFP Board issued an order suspending Mr. Amirali’s right to use the CFP® certification marks for one year and one day. This discipline followed CFP Board’s investigation of Mr. Amirali’s 2008 termination from employment, which CFP Board discovered during a routine background check related to Mr. Amirali’s Initial Application for CFP® Certification. In September 2008, Mr. Amirali’s employer received a request from FINRA to investigate allegations that he signed a client’s initials on managed money and annuity documents. Mr. Amirali acknowledged that he had signed numerous customers’ initials on documents that he personally handled or that were under his supervision, and Mr. Amirali’s employer terminated Mr. Amirali’s employment in October 2008. The Commission determined that Mr. Amirali’s conduct violated Rules 102, 201, 406, 606(b) and 607 of CFP Board’s Code of Ethics and Professional Responsibility and provided grounds for discipline pursuant to Article 3(a) of CFP Board’s Disciplinary Rules and Procedures (“Disciplinary Rules”). Accordingly, the Commission issued a suspension of one year and one day of Mr. Amirali’s right to use the CFP® certification marks, pursuant to Article 4.5 of the Disciplinary Rules. Mr. Amirali’s suspension is effective from November 30, 2009 to December 1, 2010.

Daniel P. Hensley (San Antonio): In November 2009, following a hearing by CFP Board’s Disciplinary and Ethics Commission (“Commission”), CFP Board issued an order suspending Daniel P. Hensley’s right to use the CFP® certification marks for three years. Following Mr. Hensley’s 2009 application for reinstatement of his CFP® certification, which had been administratively relinquished for failure to complete renewal requirements, CFP Board conducted a routine background check and discovered that Mr. Hensley had filed two Chapter 7 bankruptcies. The first bankruptcy, filed in 1990, involved Mr. Hensley’s sole proprietorship as a commission- and fee-based financial planner. The second bankruptcy, filed in 2003, involved Mr. Hensley’s employee benefit practice. The Commission determined that Mr. Hensley’s bankruptcies violated Rule 607 of CFP Board’s Code of Ethics and Professional Responsibility and provided grounds for discipline pursuant to Article 3(a) of CFP Board’s Disciplinary Rules and Procedures. The Commission considered as an aggravating factor that Mr. Hensley’s bankruptcies related to his financial planning practice. The Commission expressed concern about Mr. Hensley’s ability to manage his financial affairs effectively and the potential impact Mr. Hensley’s financial affairs could have on his clients and the CFP® marks. Mr. Hensley’s suspension is effective from December 2, 2009 to December 2, 2012.

Revocations and Denial of Certification

FLORIDA

Christopher V. Eardley (Ocala): In November 2009, following a hearing by CFP Board’s Disciplinary and Ethics Commission (“Commission”), CFP Board issued an order permanently denying Mr. Eardley the right to use the CFP® certification marks. This discipline followed CFP Board’s investigation of a client complaint filed against Mr. Eardley with his broker-dealer, which CFP Board discovered pursuant to a routine background check related to Mr. Eardley’s Initial Application for CFP® Certification. The customer complaint concerned an alleged unsuitable investment recommendation made by Mr. Eardley to an elderly client. Specifically, CFP Board alleged in its Complaint: 1) Mr. Eardley recommended a high risk, volatile fund which represented 79.4% of the portfolio of a senior client whose investment objective was conservative income; 2) Mr. Eardley failed to notify the client of other options within the variable annuity and within the family of funds so that the client could avoid a $10,000 surrender charge; 3) Mr. Eardley studied the long-term performance of the institutional side of the Fund, which had been in existence longer than the public side of the Fund; and 4) Mr. Eardley based his investment recommendation to the client on the long-term institutional performance of the Fund, rather than on an analysis of the public side of the Fund. CFP Board also alleged in its complaint that According to the Florida Stipulation and Consent Agreement signed by Mr. Eardley, his actions violated NASD Conduct Rule 2310(a), and IM-2310-2(a)(1), Florida Administrative Code Rule 69W-600.013(2)(h), and Florida Statutes Section 517.161(1)(a). Finally, CFP Board alleged in its Complaint that Mr. Eardley failed to disclose to CFP Board his criminal arrest and charge for a Petit Theft misdemeanor when he signed the Declaration Section of his Initial Application for CFP® Certification. CFP Board’s Complaint alleged that Mr. Eardley’s conduct gave rise to violations of Rules 201, 401(a), 606(a), 606(b), 607 and 704 of CFP Board’s Code of Ethics and Professional Responsibility and provided grounds for discipline pursuant to Articles 3(a) and 3(g) of CFP Board’s Disciplinary Rules and Procedures (“Disciplinary Rules”). Mr. Eardley failed to file an Answer to CFP Board’s Complaint within twenty calendar days of the date of service, as required by Rule 7.3 of CFP Board’s Disciplinary Rules. Accordingly, pursuant to Article 7.4 of the Disciplinary Rules, the allegations set forth in the Complaint were deemed admitted, and the Commission issued an Order of Denial permanently denying Mr. Eardley the right to use the CFP® certification marks.

NEW JERSEY

Kevin R. Johnson (Princeton): In November 2009, following a hearing by CFP Board’s Disciplinary and Ethics Commission (“Commission”), CFP Board issued an order permanently revoking Mr. Johnson’s right to use the CFP® certification marks. This discipline followed CFP Board’s investigation of a March 2004 Letter of Acceptance Waiver and Consent (“AWC”) entered into by Mr. Johnson with FINRA. In the AWC, FINRA determined that Mr. Johnson: 1) failed to disclose to public customers material information concerning a stock issuer; 2) recommended the purchase of shares of stock without a reasonable basis, thereby recommending unsuitable securities; 3) solicited a customer to purchase stock that was not reviewed by the firm’s research analyst or otherwise excepted from approval; and 4) failed to submit the required form for approval of the solicitations, causing the firm’s records to be inaccurate. As a result of these findings, FINRA suspended Mr. Johnson for one year. CFP Board’s Complaint alleged that Mr. Johnson’s conduct gave rise to violations of Rules 102, 201, 606(a), 606(b) and 607 of CFP Board’s Code of Ethics and Professional Responsibility and provided grounds for discipline pursuant to Articles 3(a) and 3(e) of CFP Board’s Disciplinary Rules and Procedures (“Disciplinary Rules”). Mr. Johnson failed to respond to the allegations in CFP Board’s complaint within twenty calendar days of the date of service, as required by Article 7.3 of CFP Board’s Disciplinary Rules. Accordingly, pursuant to Article 7.4 of the Disciplinary Rules, the allegations set forth in the Complaint were deemed admitted, and the Commission issued an Order of Revocation permanently revoking Mr. Johnson’s right to use the CFP® certification marks.

WISCONSIN

Derek McSherry (Lake Geneva): In November 2009, following a hearing by CFP Board’s Disciplinary and Ethics Commission (“Commission”), CFP Board issued an order permanently revoking Mr. McSherry’s right to use the CFP® certification marks. This discipline followed CFP Board’s investigation of five separate matters where the Commission determined that Mr. McSherry: 1) provided confidential client information to third parties without the client’s consent; 2) forged a client signature by cutting and pasting the signature from one document to another for which he received a 15-day professional suspension from the State of Wisconsin; 3) mailed a solicitation in potential violation of a non-compete agreement; 4) misrepresented to his partner that he sought the advice of counsel with respect to the solicitation; and 5) failed to report the Wisconsin suspension to CFP Board within 10 calendar days. The Commission determined that Mr. McSherry’s conduct violated Rules 102, 201, 406, 501, 503, 606(b) and 607 of CFP Board’s Code of Ethics and Professional Responsibility and provided grounds for discipline pursuant to Articles 3(a) and 3(e) of CFP Board’s Disciplinary Rules and Procedures. Accordingly, the Commission permanently revoked Mr. McSherry’s right to use the CFP® certification marks.

FOR IMMEDIATE RELEASE

CONTACT:
Michael P. Shaw, Managing Director, Professional Review and Legal
Phone: 202 379-2230
Email: mshaw@CFPBoard.org

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Anyone can call himself a “financial planner.” Only professionals who meet CFP Board’s rigorous standards can call themselves CERTIFIED FINANCIAL PLANNER™ professionals.
The 2013 Household Financial Planning Survey shows that those with a financial plan feel more confident and report more success managing money, savings and investments than those without a plan.
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