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27735 – Anonymous Case History
Decision: Letter of Admonition
Keyword(s): Suitability; Fraud Related to Professional Activity; Professionalism; Disclosure to Clients; Client's Best Interest; Customer Complaints
Standard(s) Violated: Article 202; 606(b); 201; 703; 607
Matter Type(s): Client Dissatisfaction
Decision Date: 05/14/2014
Summary: Whether a CFP® professional (“Respondent”) violated CFP Board’s Standards of Professional Conduct when she: 1) recommended that a client, a risk-adverse retiree, invest $100,000 into The Fund, an investment that Respondent described as a partnership, but which was in actuality a hedge fund; 2) failed to disclose the conflict of interest that existed as a result of Respondent’s role as Advisor for The Fund; 3) recommended The Fund to Grievant although Respondent when the client may not have met the requirements to be an accredited investor; and 4) denied any remunerative connection to The Fund, despite her advisory role.

28508 – Anonymous Case History
Decision: Private Censure
Keyword(s): Client's Best Interest; Supervision; Fraud Related to Professional Activity; Professionalism; Suitability
Standard(s) Violated: Article 201; 407(a); 705; 401(a); 703; 202; 607
Matter Type(s): FINRA Arbitration
Decision Date: 05/14/2014
Summary: Whether a CFP® professional (“Respondent”) violated CFP Board’s Standards of Professional Conduct when he: 1) recommended the Biotech Company stock to Client without giving the client the prospectuses or PPMs for the penny stock investments: 2) sold the Biotech Company stock to Client without the knowledge or approval of Firm; 3) discouraged the Clients from selling the penny stocks, while he sold his own Biotech Company shares; 4) recommended to Client the loan to Biotech Company, a company in which he had a personal stake, without disclosing the inherent conflict of interest; and 5) personally reimbursed Client $30,000 as compensation for a loan recommendation he made to Client.

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