Certified Financial Planner Board of Standards, Inc. (CFP Board) announced today that it has imposed an automatic interim suspension of Michael Breton’s CFP® certification, effective April 14, 2017.
CFP Board imposed an automatic interim suspension after discovering that Mr. Breton was barred by the U. S. Securities and Exchange Commission (SEC) from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent or nationally recognized statistical rating organization. The SEC filed a civil complaint against Mr. Breton and his firm alleging that he, acting through his firm, defrauded at least 30 clients by allocating profitable trades to his own accounts and unprofitable trades to client accounts. The SEC alleged Mr. Breton placed over $100 million in securities trades through his firm, but typically did not designate whether the trades would be allocated to client accounts or his accounts. According to the SEC, Mr. Breton often waited to allocate the trades until after he had some information about whether the trades would likely be profitable. Using this information, the SEC alleged Mr. Breton “cherry-picked” the profitable trades for his accounts, misleading clients and breaching the fiduciary duty that he and his firm owed to each client. The SEC further alleged Mr. Breton made more than $1.3 million in profits derived from trades that he fraudulently did not allocate to the client accounts. Finally, the SEC alleged that Mr. Breton’s conduct violated various antifraud statutes and SEC rules.
In February 2017, the Court entered a final judgment by consent against Mr. Breton, permanently enjoining him from future violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940 (Advisors Act). In March 2017, following the entry of the final judgment, the SEC issued an Order Instituting Administrative Proceedings pursuant to Section 2013(f) of the Advisers Act, Making Findings, and Imposing Remedial Sanctions (SEC Order). In the SEC Order, the SEC barred Mr. Breton from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization, among other things.
Pursuant to Article 5.7 of CFP Board’s Disciplinary Rules, “[a]n 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…revocation of a financial professional license (securities, insurance, accounting or bank-related license).” Under the interim suspension order, Mr. Breton’s right to use the CFP® certification marks is suspended pending CFP Board’s completed investigation and possible further disciplinary proceedings.
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.
CFP Board enforces its ethical standards by investigating incidents of alleged unethical behavior by CFP® professionals. In cases where violations are found, the Disciplinary and Ethics Commission (Commission) may impose discipline ranging from a private censure or public letter of admonition to the suspension or revocation of an individual’s right to use the CFP® marks. CFP Board’s Disciplinary Rules and Procedures (Disciplinary Rules) set forth the process for investigating matters and imposing discipline where violations have been found.
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 76,000 individuals to use these marks in the U.S.
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