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CFP Board Censures Improper CFP® Professional Conduct

Jun 18, 2014

Washington, D.C., June 18, 2014 – Certified Financial Planner Board of Standards, Inc. (CFP Board) announced today public disciplinary actions against the following individuals’ right to use the CFP® certification marks, effective immediately or on the date noted in each case. Public disciplinary actions taken by CFP Board, in order of increasing severity, include letters of admonition, suspensions and permanent revocations.

This release contains information about disciplinary actions relating to 14 CFP® professionals. Of these actions, there were 4 revocations, 4 suspensions, 3 interim suspensions and 4 letters of admonition.

The basis for each decision can be found in a Disciplinary Action Report below and on CFP Board’s website. The public may check on an individual’s disciplinary history and certification status with CFP Board at www.CFP.net/verify.

CFP Board’s enforcement process is a critical consumer protection. CFP® professionals agree to abide by CFP Board’s Standards of Professional Conduct (Standards), which includes the Code of Ethics and Professional Responsibility (Code of Ethics), Rules of Conduct and Financial Planning Practice Standards (Practice Standards). The Standards set forth the ethical standards for financial planners who hold the CFP® certification, who agree to act fairly and diligently when providing clients with financial planning advice and services, putting the clients’ interests first.

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 (Disciplinary Rules). 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 set forth a fair process for investigating matters and imposing discipline where violations have been found.

The actions in this release result from final decisions of the Disciplinary and Ethics Commission (Commission).  The Commission meets three times a year to provide a fair, unbiased review of any matter in which a CFP® professional is alleged to have committed violations of the Standards.  

The Commission functions in accordance with the Disciplinary Rules and reviews all matters on a case-by-case basis, taking into account the details specific to an individual case. While CFP Board has attempted to capture the details relevant to each decision, the summary nature of these releases may omit certain details affecting the decision. Accordingly, the decisions and/or rationale described in the releases may not apply to other cases reviewed by the Commission or reflect the Commission’s future interpretation or application of the Standards.

STATE NAME LOCATION DISCIPLINE
California
Jacob K. Cooper San Diego Interim Suspension
California
Susan C. Cromwell Valencia Suspension
California Shawn R. Gutierrez Yuba City Revocation
Florida
William G. Whitcomb Fort Myers Suspension
Illinois William F. Kovacic Palos Heights Interim Suspension
Illinois
William F. Kovacic
Palos Heights
Suspension
Indiana Dawn L. Muldrow Indianapolis Revocation
Iowa Donald G. DeWaay, Jr. Clive Revocation
Kansas Shawn M. Wyatt, CFP®
Hutchinson Letter of Admonition
Minnesota Barbara J. Stark Eden Prairie Revocation
Ohio Carolyn C. Kaufman Hudson Interim Suspension
Ohio Howard A. Slater Solon Suspension
Texas Brian W. Sak, CFP® Magnolia Letter of Admonition
Texas George M. Warner, CFP®
Rockwall Letter of Admonition
Wisconsin Christina V. Winch, CFP®
Appleton Letter of Admonition

LETTERS OF ADMONITION

KANSAS

Shawn M. Wyatt, CFP® (Hutchinson): In April 2014, following a review by CFP Board’s Disciplinary and Ethics Commission, CFP Board issued a Letter of Admonition to Mr. Wyatt. This discipline followed the Commission’s determination that Mr. Wyatt completed a mandatory annuity training course for his supervisor.  The mandatory annuity training course was required by the state for all registered representatives prior to selling, soliciting or negotiating annuities.  Mr. Wyatt accepted compensation from his supervisor in exchange for completing the course on her behalf.  Mr. Wyatt admitted to his firm that he completed the course on behalf of his supervisor, which resulted in his termination.  The Financial Industry Regulatory Authority, Inc. investigated Mr. Wyatt’s termination and suspended him for 31 calendar days and fined him $5,000.  The Commission determined that Mr. Wyatt’s conduct violated Rules 5.1 and 6.5 of CFP Board’s Rules of Conduct, which provided grounds for discipline pursuant to Articles 3(a) and 3(d) of CFP Board’s Disciplinary Rules and Procedures.  Accordingly, the Commission admonished Mr. Wyatt with regard to the above-mentioned conduct. 

TEXAS

Brian W. Sak, CFP® (Magnolia): In April 2014, following a review by CFP Board’s Disciplinary and Ethics Commission, CFP Board issued a Letter of Admonition to Mr. Sak. This discipline followed Mr. Sak’s entry into a settlement agreement with CFP Board in which he consented to CFP Board’s findings that he failed to disclose outside business activities to his broker dealer.  Mr. Sak signed a partnership agreement with two other registered representatives creating an entity whose purpose was to provide a vehicle to develop business opportunities in the sale of fixed annuities, insurance products, real estate investments and business planning services.  Mr. Sak subsequently certified to his firm that he was not engaged in any outside business activities.  The Financial Industry Regulatory Authority, Inc. fined Mr. Sak $5,000 and suspended him in all capacities for 30 calendar days.  Mr. Sak consented to a violation of Rule 6.5 of CFP Board’s Rules of Conduct, providing grounds for discipline pursuant to Articles 3(a) and 3(d) of CFP Board’s Disciplinary Rules and Procedures.  Accordingly, the Commission admonished Mr. Sak with regard to the above-mentioned conduct. 

George M. Warner, CFP® (Rockwall): In April 2014, following a review by CFP Board’s Disciplinary and Ethics Commission, CFP Board issued a Letter of Admonition to Mr. Warner. This discipline followed Mr. Warner’s entry into a settlement agreement with CFP Board in which he consented to CFP Board’s findings that he maintained blank, signed Automated Customer Account Transfer forms for 75 clients to allow for an administrative account transfer required by his firm.  Mr. Warner’s firm terminated him for obtaining client signatures on blank account transfer forms.  Mr. Warner consented to violations of Rules 4.3, 4.4, 5.1 and 6.5 of CFP Board’s Rules of Conduct, providing grounds for discipline pursuant to Article 3(a) of CFP Board’s Disciplinary Rules and Procedures.  Accordingly, the Commission admonished Mr. Warner with regard to the above-mentioned conduct. 

WISCONSIN

Christina V. Winch, CFP® (Appleton): In April 2014, following a review by CFP Board’s Disciplinary and Ethics Commission, CFP Board issued a Letter of Admonition to Ms. Winch. This discipline followed the Commission’s determination that Ms. Winch failed to perform sufficient due diligence or research to fully educate herself regarding the details of a private placement she recommended to an elderly client with whom Ms. Winch was in a financial planning relationship.  Ms. Winch’s recommendation that the client invest in the private placement was not in the interest of the client given the client’s total investable assets and stated risk tolerance.  The Commission determined that Ms. Winch’s conduct violated Rules 201, 202, 606(b), 607 and 703 of CFP Board’s Code of Ethics and Practice Standard 500-2, providing grounds for discipline pursuant to Articles 3(a) and 3(b) of CFP Board’s Disciplinary Rules and Procedures. Accordingly, the Commission admonished Ms. Winch with regard to the above-mentioned conduct. 

INTERIM SUSPENSION

CALIFORNIA

Jacob K. Cooper (San Diego): In May 2014, CFP Board issued Mr. Cooper an interim suspension of his right to use the CFP® certification marks.  CFP Board initiated interim suspension proceedings against Mr. Cooper after learning that the Securities and Exchange Commission initiated administrative and cease and desist proceedings against Mr. Cooper and his firm, Total Wealth Management, Inc., alleging that Mr. Cooper and the firm had breached its fiduciary duty and committed fraud by failing to disclose material information regarding its receipt of revenue sharing from outside funds.  Mr. Cooper failed to respond to CFP Board’s Order to Show Cause within 20 calendar days, as required by CFP Board’s Disciplinary Rules and Procedures. As a result, the allegations set forth in the Order to Show Cause were deemed admitted, and CFP Board issued an interim suspension order. Under the interim suspension order, Mr. Cooper’s right to use the CFP® certification marks is suspended pending CFP Board’s completed investigation.  The interim suspension order became effective on June 5, 2014.

ILLINOIS

William F. Kovacic (Palos Heights): In November 2013, CFP Board issued Mr. Kovacic an automatic interim suspension of his right to use the CFP® certification marks.  CFP Board issued an automatic interim suspension after discovering that Mr. Kovacic pleaded guilty to two counts of aggravated battery, which were felonies.  Mr. Kovacic was charged with two counts of aggravated battery when he pushed a ten-year old boy towards a urinal and grabbed another boy by the hood of his sweatshirt in the restroom of a restaurant.  Pursuant to Article 5.7 of the Disciplinary Rules and Procedures, “An interim suspension shall immediately be issued without a hearing when CFP Board Counsel receives evidence of a conviction or a professional discipline in accordance with Article 13.1 … for a felony conviction for any crime.” Under the interim suspension order, Mr. Kovacic’s right to use the CFP® marks is suspended pending CFP Board’s completed investigation and possible further disciplinary proceedings.  The interim suspension order became effective on November 8, 2013. 

OHIO

Carolyn C. Kaufman (Hudson): In April 2014, CFP Board issued Ms. Kaufman an Interim Suspension of her right to use the CFP® certification marks.  CFP Board issued an Order to Show Cause after discovering that a federal jury had convicted Ms. Kaufman of Conspiracy to Obstruct Justice, Obstruction of Justice and Perjury.  The convictions stemmed from Ms. Kaufman’s employer’s attempts to defraud the National Basketball Players Association through the use of a fraudulent retention contract for investment advisory services.  Prior to testifying before a grand jury, Ms. Kaufman received instruction from her employer regarding how to answer questions relating to the retention contract.  Ms. Kaufman testified under oath that she had no discussions with her employer regarding her grand jury testimony prior to providing her testimony.  The Financial Industry Regulatory Authority, Inc. (FINRA) suspended Ms. Kaufman from associating with any FINRA member due to her failure to respond to requests for information regarding the fraudulent retention contract.  Pursuant to Article 5.6 of the Disciplinary Rules and Procedures, the Commission issued an interim suspension after determining that Ms. Kaufman failed to meet her burden of proof in response to the Order to Show Cause.  Under the interim suspension order, Ms. Kaufman’s right to use the CFP® marks is suspended pending CFP Board’s completed investigation and possible further disciplinary proceedings.  The interim suspension order became effective on April 30, 2014. 

SUSPENSIONS

CALIFORNIA

Susan C. Cromwell (Valencia) In April 2014, following a review by CFP Board’s Disciplinary and Ethics Commission, CFP Board issued an order suspending Ms. Cromwell’s right to use the CFP® certification marks for one year and requiring Ms. Cromwell to complete six hours of remedial education in general principles of financial planning.  This discipline followed the Commission’s determination that Ms. Cromwell filed for Chapter 7 Bankruptcy in 1992 and again in 2012.  The Commission determined that Ms. Cromwell’s conduct violated Rule 6.5 of the Rules of Conduct, providing grounds for discipline pursuant to Article 3(a) of CFP Board’s Disciplinary Rules and Procedures (Disciplinary Rules).  The Commission determined to deviate from CFP Board’s Sanction Guidelines because Ms. Cromwell’s conduct did not harm any clients, she maintained a clean disciplinary record and her first bankruptcy occurred over 20 years prior to the hearing.  In accordance with Article 4.3 of the Disciplinary Rules, the Commission suspended Ms. Cromwell’s right to use the CFP® certification marks for one year.  Ms. Cromwell’s suspension is effective from May 11, 2014 to May 11, 2015.

FLORIDA

William G. Whitcomb (Fort Myers): In April 2014, following a review by CFP Board’s Disciplinary and Ethics Commission, CFP Board issued an order suspending Mr. Whitcomb’s right to use the CFP® certification marks for five years.  This discipline followed Mr. Whitcomb’s entry into a settlement agreement with CFP Board in which he consented to CFP Board’s findings that he: 1) entered a plea of nolo contendere to the felony charge of Unauthorized Computer Access; and 2) failed to respond to multiple CFP Board requests for information and documentation.  Mr. Whitcomb was sentenced to three years of felony probation for the Unauthorized Computer Access charge.  Mr. Whitcomb’s plea stemmed from his arrest on one count of Possession of Child Pornography with Intent to Promote.  Mr. Whitcomb consented to violations of Rules 6.1 and 6.5 of CFP Board’s Rules of Conduct, providing grounds for discipline pursuant to Articles 3(a), 3(c), 3(e) and 3(f) of CFP Board’s Disciplinary Rules and Procedures (Disciplinary Rules)In accordance with Article 4.3 of the Disciplinary Rules, the Commission suspended Mr. Whitcomb’s right to use the CFP® certification marks for five years.  Mr. Whitcomb’s suspension is effective from April 11, 2014 to April 11, 2019.

ILLINOIS

William F. Kovacic (Palos Heights): In April 2014, following a review by CFP Board’s Disciplinary and Ethics Commission, CFP Board issued an order suspending Mr. Kovacic’s right to use the CFP® certification marks for 18 months. This discipline followed Mr. Kovacic’s entry into a settlement agreement with CFP Board in which he consented to CFP Board’s findings that he pleaded guilty to two counts of aggravated battery, which were felonies.  Mr. Kovacic was charged with two counts of aggravated battery when he pushed a ten-year old boy towards a urinal and grabbed another boy by the hood of his sweatshirt in the restroom of a restaurant.  CFP Board determined that Mr. Kovacic’s conduct violated Rule 6.5 of CFP Board’s Rules of Conduct, providing grounds for discipline pursuant to Articles 3(a), 3(c) and 3(f) of CFP Board’s Disciplinary Rules and Procedures (Disciplinary Rules).  In accordance with Article 4.3 of the Disciplinary Rules, the Commission suspended Mr. Kovacic’s right to use the CFP® certification marks for 18 months.  Mr. Kovacic’s suspension is effective from April 11, 2014 to October 11, 2015.

OHIO

Howard A. Slater (Solon): In March 2014, following a hearing before CFP Board’s Disciplinary and Ethics Commission, CFP Board issued an order suspending Mr. Slater’s right to use the CFP® certification marks for one year and one day.  The discipline followed Mr. Slater’s entry into a settlement agreement with CFP Board in which he consented to CFP Board’s findings that he: 1) sent emails to two clients in connection with their purchase of a secured loan fund that contained material misrepresentations regarding the fund’s liquidity; 2) sent an email to a third client that contained misleading and unwarranted statements regarding the safety of the fund by addressing only the positive attributes of the fund; and 3) caused a client’s account records to reflect false annual income and net worth information.  The Financial Industry Regulatory Authority, Inc. (FINRA) suspended Mr. Slater for five months in any capacity and fined him $30,000.  Mr. Slater also consented to a suspension of his Ohio securities salesperson license and investment adviser representative license concurrent with the FINRA suspension.  The Commission determined that Mr. Slater’s conduct violated Rules 102, 201, 406, 606(a) and 607 of CFP Board’s Code of Ethics, which provided grounds for discipline pursuant to Articles 3(a), 3(d) and 3(e) of CFP Board’s Disciplinary Rules and Procedures (Disciplinary Rules).  In accordance with Article 4.3 of the Disciplinary Rules, Mr. Slater’s right to use the CFP® certification marks is suspended for one year and one day.  Mr. Slater’s suspension is effective from March 26, 2014 to March 27, 2015.

REVOCATIONS

CALIFORNIA

Shawn R. Gutierrez (Yuba City): In April 2014, CFP Board issued an order permanently revoking Mr. Gutierrez’s right to use the CFP® certification marks. This discipline followed Mr. Gutierrez’s failure to file an answer to CFP Board’s Complaint within the required time period. CFP Board’s Complaint alleged that Mr. Gutierrez: 1) exhibited a pattern of criminal conduct from 2009 to 2012 resulting in his conviction for vandalism; and 2) was convicted of domestic battery in 2013.  CFP Board’s Complaint further alleged that Mr. Gutierrez’s conduct violated Rule 6.5 of CFP Board’s Rules of Conduct, providing grounds for discipline under Articles 3(a), 3(c) and 3(e) of the Disciplinary Rules and Procedures (Disciplinary Rules).  Mr. Gutierrez failed to file an Answer to CFP Board’s Complaint within 20 calendar days of the date of service, as required by Article 7.3 of CFP Board’s Disciplinary Rules.  In accordance with Article 7.4 of the Disciplinary Rules, the allegations set forth in the Complaint were deemed admitted, and CFP Board issued an Administrative Order of Revocation.  Mr. Gutierrez’s revocation is effective as of May 12, 2014.

INDIANA

Dawn L. Muldrow (Indianapolis): In January 2014, CFP Board issued an order permanently revoking Ms. Muldrow’s right to use the CFP® certification marks. This discipline followed Ms. Muldrow’s failure to file an answer to CFP Board’s Complaint within the required time period. CFP Board’s Complaint alleged that Ms. Muldrow: 1) had a 2009 tax warrant and civil judgments in 2009, 2010, 2011 and 2012; and 2) failed to respond to CFP Board’s requests for information.  CFP Board’s Complaint further alleged that Ms. Muldrow’s conduct violated Rules 6.1 and 6.5 of CFP Board’s Rules of Conduct, providing grounds for discipline under Articles 3(a) and 3(f) of CFP Board’s Disciplinary Rules and Procedures (Disciplinary Rules). Ms. Muldrow failed to file an Answer to CFP Board’s Complaint within 20 calendar days of the date of service, as required by Article 7.3 of CFP Board’s Disciplinary Rules.  In accordance with Article 7.4 of the Disciplinary Rules, the allegations set forth in the Complaint were deemed admitted, and CFP Board issued an Administrative Order of Revocation.  Ms. Muldrow’s revocation is effective as of February 9, 2014.

IOWA

Donald G. DeWaay, Jr. (Clive): In April 2014, CFP Board issued an order permanently revoking Mr. DeWaay’s right to use the CFP® certification marks. This discipline followed Mr. DeWaay’s failure to file an answer to CFP Board’s Complaint within the required time period. CFP Board’s Complaint alleged that Mr. DeWaay: 1) engaged in a pattern of recommending and selling his clients unsuitable tenant-in-common interests (TICs), private placements and real estate investment trusts (REITs); 2) engaged in a pattern of failing to detect and prevent other registered representatives of his firm from recommending and selling clients unsuitable TICs, private placements and REITs; and 3) made misleading, exaggerated, and unwarranted statements to clients and/or prospective clients regarding a private placement offering.  CFP Board’s Complaint further alleged that Mr. DeWaay’s conduct violated Rules 201 and 607 of the Code of Ethics and Rules 1.4, 2.1, 4.1, 4.3, 4.4, 5.1 and 6.5 of CFP Board’s Rules of Conduct, providing grounds for discipline under Articles 3(a), 3(d), 3(e) and 3(f) of CFP Board’s Disciplinary Rules and Procedures (Disciplinary Rules). Mr. DeWaay failed to file an Answer to CFP Board’s Complaint within 20 calendar days of the date of service, as required by Article 7.3 of CFP Board’s Disciplinary Rules.  In accordance with Article 7.4 of the Disciplinary Rules, the allegations set forth in the Complaint were deemed admitted, and CFP Board issued an Administrative Order of Revocation.  Mr. DeWaay’s revocation is effective as of May 12, 2014.

MINNESOTA

Barbara Stark (Eden Prairie): In April 2014, CFP Board issued an order permanently revoking Ms. Stark’s right to use the CFP® certification marks. This discipline followed Ms. Stark’s failure to file an answer to CFP Board’s Complaint within the required time period. CFP Board’s Complaint alleged that Ms. Stark: 1) misappropriated and transferred assets from approximately 21 client accounts to new accounts at a different firm; 2) used improper addresses for clients; 3) allowed a paraplanner to operate a tax preparation service out of Ms. Stark’s office; 4) failed to deliver all clients files to her firm upon request; 5) failed to provide adequate supervision to the paraplanner; and 6) failed to respond to the Financial Industry Regulatory Authority, Inc.’s request for testimony.  CFP Board’s Complaint further alleged that Ms. Stark’s conduct violated Rules 4.3, 4.4, 4.6, 5.1 and 6.5 of CFP Board’s Rules of Conduct, providing grounds for discipline under Articles 3(a), 3(d) and 3(e) of CFP Board’s Disciplinary Rules and Procedures (Disciplinary Rules). Ms. Stark failed to file an Answer to CFP Board’s Complaint within 20 calendar days of the date of service, as required by Article 7.3 of CFP Board’s Disciplinary Rules.  In accordance with Article 7.4 of the Disciplinary Rules, the allegations set forth in the Complaint were deemed admitted, and CFP Board issued an Administrative Order of Revocation.  Ms. Stark’s revocation is effective as of May 12, 2014.


ABOUT CFP BOARD

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 competent and ethical personal financial planning. The Board of Directors, in furthering CFP Board's mission, acts on behalf of the public, CFP® professionals and other stakeholders. CFP Board owns the certification marks CFP® , CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) 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 66,000 individuals to use these marks in the U.S.

CONTACT:
 Dan Drummond, Director of External Communications P: 202-379-2252 M: 202-243-8621 E: ddrummond@cfpboard.org Twitter: @cfpboardmedia

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