CFP Board Imposes Public Discipline

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CFP Board Imposes Public Discipline

Jan 16, 2019

Disciplinary actions relate to 10 current or former CFP® professionals

Certified Financial Planner Board of Standards, Inc. (CFP Board) announced today public disciplinary actions against the following individuals, 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 recent disciplinary actions relating to 10 current or former CFP® professionals. Of these actions, there were 2 public letters of admonition, 5 suspensions, and 3 administrative revocations.

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, Rules of Conduct and Financial Planning Practice Standards.

CFP Board enforces its ethical standards by investigating incidents of alleged violations and, where there is probable cause to believe there are grounds for discipline, presenting a Complaint containing the alleged violations to the CFP Board’s Disciplinary and Ethics Commission (Commission) pursuant to CFP Board’s Disciplinary Rules and Procedures (Disciplinary Rules).  If the Commission determines there are grounds for discipline, it may impose a sanction ranging from a private censure or public letter of admonition to the suspension or revocation of the right to use the CFP® marks.  CFP Board’s Disciplinary Rules set forth the process for investigating matters and imposing discipline where violations have been found.

The Commission meets at least six 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

Julie A. Bower, CFP®

Newport Beach

Public Letter of Admonition

Colorado

Scott P. Evans

Glendale

One Year and One Day Suspension

New Jersey

Jared S. Friedman

Scotch Plains

Six-Month Suspension

Illinois

Richard P. Hohol

Roselle

Six-Month Suspension

Georgia

Ike Ikokwu

Alpharetta

Five-Year Suspension

Missouri

Robert A. Kahn

Chesterfield

Administrative Revocation

California

Mark A. Nordbrock

Santa Monica

Six-month Suspension

Michigan

Andrew L. Schade

Lansing

Administrative Revocation

California

Dean C. Tellone, CFP®

Anaheim

Public Letter of Admonition

Florida

John P. Wheeler

St. Petersburg

Administrative Revocation

LETTER OF ADMONITION

CALIFORNIA

Julie A. Bower, CFP® (Newport Beach): In December 2018, CFP Board’s Disciplinary and Ethics Commission (Commission) and Ms. Bower entered into a settlement agreement in which Ms. Bower agreed that CFP Board would issue a Letter of Admonition.  In the settlement agreement, Ms. Bower consented to CFP Board’s findings that, in connection with a client’s 2012 annuity surrender transaction, she failed to satisfy the fiduciary duty of care she owed to her client and failed to make and/or implement suitable recommendations when she assumed incorrectly that certain “contributions” information reflected on an annuity account statement consisted of the “cost basis” of the annuity, failed to request information from her client or the annuity company that would have helped her to determine the correct cost basis of the annuity, and recommended that her client surrender or cash out a portion of the annuity without verifying the cost basis, which caused her client to incur substantial tax penalties and interest.  CFP Board determined that Ms. Bower’s conduct violated Rules 1.4 and 4.5 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 Ms. Bower with regard to the above-described conduct. 

Dean C. Tellone, CFP® (Anaheim): In December 2018, CFP Board’s Disciplinary and Ethics Commission (Commission) and Mr. Tellone entered into a settlement agreement in which Mr. Tellone agreed that CFP Board would issue a Letter of Admonition.  In the settlement agreement, Mr. Tellone, who is the President, Founder, Secretary, Treasurer, and Director of a registered investment adviser, consented to CFP Board’s findings that he and his firm allocated trades which occasionally were inconsistent with statements in the firm’s Form ADV filed with the Securities and Exchange Commission (SEC) in 2011 through 2015 and failed to follow compliance policies.  Specifically, the firm allocated day trades with a profit of less than $300 to a day trade account, even though the firm never identified the day trade account as an account to be allocated a block trade.  The firm’s Form ADV stated that the firm would group trades based upon investment profiles, risk tolerance, account features such as option and margin trading, cash availability, and commission pricing.  Because of this allocation, the day trade account received risk-free and profitable day trades whereas the firm’s other clients bore all the market risk of the day trade account.  CFP Board further determined that the firm and Mr. Tellone, without admitting or denying, consented to a Cease and Desist Order by the SEC on May 5, 2017 in which the SEC found that Mr. Tellone and the firm violated Section 206(2) of the Investment Advisers Act of 1940 (Advisers Act), which prohibits investment advisers from directly or indirectly engaging in “any transaction, practice or course of business which operates as a fraud or deceit upon any client.”  In the SEC settlement, Mr. Tellone and the firm also consented to the finding by the SEC that they violated Section 207 of the Advisers Act, which makes it “unlawful for any person willfully to make any untrue statement of a material fact in any registration application or report filed with the commission . . . or willfully to omit to state in any such application or report any material fact which is required to be stated therein.” Pursuant to the Cease and Desist Order, the SEC ordered that (1) Mr. Tellone and the firm cease and desist from committing or causing any violations of Sections 206(2) and 207 of the Advisers Act; (2) Mr. Tellone and the firm be censured; (3) the firm pay a civil penalty of $75,000.00; and (4) Mr. Tellone pay a civil penalty of $25,000.  CFP Board determined that Mr. Tellone’s conduct violated Rules 2.1, 4.1, 4.3, and 4.4 of CFP Board’s Rules of Conduct, and 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. Tellone with regard to the above-described conduct.  

SUSPENSIONS

CALIFORNIA

Mark A. Nordbrock (Santa Monica): In December 2018, CFP Board’s Disciplinary and Ethics Commission (Commission) and Mr. Nordbrock entered into a settlement agreement in which Mr. Nordbrock agreed that CFP Board would issue a Suspension of his right to use the CFP® certification marks for six months.  In the settlement agreement, Mr. Nordbrock consented to CFP Board’s findings that he held himself out as a CFP® professional when he had not completed the minimum number of continuing education credit hours to satisfy CFP Board’s certification requirements.  CFP Board further found that Mr. Nordbrock made false statements to CFP Board when he self-reported his completion of certain continuing education courses that he had not actually taken.  CFP Board determined that Mr. Nordbrock’s conduct violated Rules 2.1, 6.2, and 6.5 of CFP Board’s Rules of Conduct and Article 3(G) of CFP Board’s Disciplinary Rules and Procedures (Disciplinary Rules), and provided grounds for discipline pursuant to Articles 3(A) and 3(G) of CFP Board’s Disciplinary Rules.  Accordingly, the Commission suspended Mr. Nordbrock with regard to the above-described conduct.  Mr. Nordbrock’s suspension is effective from December 12, 2018 until June 12, 2019.

COLORADO

Scott P. Evans (Glendale):  In October 2018, CFP Board’s Disciplinary and Ethics Commission (Commission) and Mr. Evans entered into a settlement agreement in which Mr. Evans agreed that CFP Board would issue a Suspension of his right to use the CFP® certification marks for one year and one day.  In the settlement agreement, Mr. Evans consented to CFP Board’s findings that he was convicted in Colorado of the felony of driving under the influence with 3+ priors on June 26, 2016, fled the scene of the crime to avoid detection for driving under the influence and did not notify the police of the crime, falsely identified another individual as the driver of the vehicle at the time of the accident, and falsely informed the arresting officer that he was not the driver of the vehicle at the time of the accident.  CFP Board determined that Mr. Evans’ conduct violated Rule 6.5 of CFP Board’s Rules of Conduct and Article 13.3 of CFP Board’s Disciplinary Rules and Procedures (Disciplinary Rules), and provided grounds for discipline pursuant to Articles 3(A) and 3(C) of CFP Board’s Disciplinary Rules.  Accordingly, the Commission suspended Mr. Evans with regard to the above-described conduct.  Mr. Evans’ suspension is effective from October 30, 2018 until October 31, 2019.

GEORGIA

Ike Ikokwu (Alpharetta): In December 2018, CFP Board’s Disciplinary and Ethics Commission (Commission) and Mr. Ikokwu entered into a settlement agreement in which Mr. Ikokwu agreed that CFP Board would issue a Suspension of his right to use the CFP® certification marks for five years.  In the settlement agreement, Mr. Ikokwu consented to CFP Board’s findings that he failed to satisfy his fiduciary duty to financial planning clients when he recommended the clients invest in a company later found to be a Ponzi scheme involving unsuitable and unregistered securities while also failing to disclose that he received selling agent commissions from the company in connection with the investments (a conflict of interest).  CFP Board also found that Mr. Ikowku continued to solicit clients to make investments in the company even after the company defaulted on a promissory note it owed to Mr. Ikokwu and his family.  CFP Board further found that Mr. Ikokwu falsely informed clients that he had performed extensive due diligence into the company and its securities when he had not and failed to disclose to clients that he had reason to believe the investment was not sound.  CFP Board also found that, in April 2018, the U.S. District Court for the District of Columbia entered a final judgment, by consent, against Mr. Ikokwu in a matter brought by the U.S. Securities and Exchange Commission (SEC), permanently enjoining him from future violations of Section 17(a) of the Securities Act of 1933, Sections 10(b) and 15(a)(1) 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.  Based on the entry of the judgment, the SEC barred Mr. Ikokwu, by consent, from the securities industry with a right to reapply after 5 years.  CFP Board determined that Mr. Ikokwu’s conduct violated Rules 1.4, 2.1, 2.2(A), 2.2(B), 4.3, and 4.5 of CFP Board’s Rules of Conduct and Article 13.4 of CFP Board’s Disciplinary Rules and Procedures (Disciplinary Rules), and provided grounds for discipline pursuant to Articles 3(A) and 3(D) of CFP Board’s Disciplinary Rules.  Accordingly, the Commission suspended Mr. Ikokwu with regard to the above-described conduct.  Mr. Ikokwu’s suspension is effective from December 12, 2018 until December 12, 2023.

ILLINOIS

Richard P. Hohol (Roselle):  In October 2018, CFP Board’s Disciplinary and Ethics Commission (Commission) and Mr. Hohol entered into a settlement agreement in which Mr. Hohol agreed that CFP Board would issue a Suspension of his right to use the CFP® certification marks for six months.  In the settlement agreement, Mr. Hohol consented to CFP Board’s findings that he allowed an unregistered person to act in a capacity that required registration when he allowed her to meet with customers, complete firm paperwork, assess suitability, make investment recommendations, and accept payment for providing these services.  Mr. Hohol also consented to the finding that he violated his firms’ policies and procedures that required him to properly associate a non-registered person with the firm and obtain fingerprints before employing that person.  CFP Board further found that the Financial Industry Regulatory Authority, Inc. (FINRA) determined that Mr. Hohol’s conduct violated FINRA Rule 2010, resulting in a two-month suspension by FINRA.  CFP Board determined that Mr. Hohol’s conduct violated Rules 4.3 and 5.1 of CFP Board’s Rules of Conduct, and provided grounds for discipline pursuant to Articles 3(A) and 3(D) of CFP Board’s Disciplinary Rules and Procedures.  Accordingly, the Commission suspended Mr. Hohol with regard to the above-mentioned conduct.  Mr. Hohol’s suspension is effective from December 12, 2018 until June 12, 2019.

NEW JERSEY

Jared S. Friedman (Scotch Plains): In December 2018, CFP Board’s Disciplinary and Ethics Commission (Commission) issued an order in which Mr. Friedman received a Suspension of his right to use the CFP® certification marks for six months. The Commission issued its order after determining that Mr. Friedman: (1) failed to inform his client and misled his firm when he signed the client’s name on two checks in 2017 without the client’s knowledge or permission; and (2) presented the checks to the firm for deposit without obtaining the firm’s permission for signing on the client’s behalf, as required by firm policy, resulting in his termination.  The Commission determined that Mr. Friedman’s conduct violated Rules 2.1, 4.3, 4.4, and 5.1 of CFP Board’s Rules of Conduct and provided grounds for discipline pursuant to Articles 3(A) and 3(D) of CFP Board’s Disciplinary Rules and Procedures. Mr. Friedman’s suspension is effective from December 17, 2018 until June 17, 2019.    

ADMINISTRATIVE REVOCATION

FLORIDA

John P. Wheeler (St. Petersburg): In October 2018, CFP Board issued an order permanently revoking Mr. Wheeler’s right to use the CFP® certification marks.  This discipline followed Mr. Wheeler’s failure to file an Answer to CFP Board’s Complaint within the required timeframe.  CFP Board’s Complaint alleged, among other things, that: (1) he received authority as a Durable Power of Attorney (POA), health surrogate and check writing authority for a non-family member client's account in violation of his firm’s policies and procedures; (2) he failed to disclose these activities to his firm as outside business activities;  (3) he made false statements to his firm during multiple annual compliance interviews that he was not serving as a POA, personal representative or acting in any other control position for any individual or entity, and also made false statements in response to email inquiries by his firm that he never had possession or control of a client's checkbook and never wrote checks to himself or any entity he controlled from the client's checkbook; (4) his employment was terminated by his firm in connection with the referenced conduct; and (5) in 2017, he entered into a Financial Industry Regulatory Authority, Inc. (FINRA) Letter of Acceptance, Waiver and Consent ("AWC") concerning the same conduct that resulted in a six-month suspension from association with any FINRA member in any capacity and a $20,000 fine.  CFP Board’s Complaint alleged that Mr. Wheeler’s conduct violated Rules 4.3, 4.4, and 5.1 of CFP Board’s Rules of Conduct and Article 13.2 of CFP Board’s Disciplinary Rules and Procedures (Disciplinary Rules), providing grounds for discipline under Articles 3(A) and 3(D) of the Disciplinary Rules.  Mr. Wheeler declined 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 the 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. Wheeler’s revocation was effective as of October 10, 2018.

MICHIGAN

Andrew L. Schade (Lansing):  In November 2018, CFP Board issued an order permanently revoking Mr. Schade’s right to use the CFP® certification marks.  This discipline followed Mr. Schade’s failure to file an Answer to CFP Board’s Complaint within the required timeframe.  CFP Board’s Complaint alleged, among other things, that Mr. Schade: (1) recommended unsuitable variable universal life insurance policies (“VUL policies”) to a husband and wife in 2012 and 2013 because the VUL policies were inconsistent with the clients’ investment objectives, risk tolerances, goals, needs, and priorities; (2) violated his fiduciary duty to act in the best interests of his clients at a time when he was providing them with financial planning services by recommending VUL policies totaling $3.9 million in death benefits to clients that required unaffordable annual payments and surrender charges; and (3) failed to exercise reasonable and prudent professional judgment when he recommended the VUL policies based upon unreasonable assumptions.  CFP Board’s Complaint alleged that Mr. Schade’s conduct violated Rules 1.4, 4.4, and 4.5 of CFP Board’s Rules of Conduct and Section 500-2 of CFP Board’s Financial Planning Practice Standards, providing grounds for discipline under Articles 3(A) and 3(B) of CFP Board’s Disciplinary Rules and Procedures (Disciplinary Rules).  Mr. Schade declined 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 the 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. Schade’s revocation was effective as of November 15, 2018.

MISSOURI

Robert A. Kahn (Chesterfield):  In November 2018, CFP Board issued an order permanently revoking Mr. Kahn’s right to use the CFP® certification marks.  This discipline followed Mr. Kahn’s failure to file an Answer to CFP Board’s Complaint within the required timeframe.  CFP Board’s Complaint alleged, among other things, that Mr. Kahn: (1) violated the policies of his firm when he engaged in excessive trading in a client’s account and improperly placed discretionary orders in that same account between 2011 and 2016; (2) by engaging in excessive trading, made recommendations that were unsuitable and placed his interests above his client’s; and (3) violated his firm’s policies.  CFP Board’s Complaint alleged that Mr. Kahn’s conduct violated Rules 1.4, 4.5, and 5.1 of CFP Board’s Rules of Conduct, providing grounds for discipline under Article 3(A) of CFP Board’s Disciplinary Rules and Procedures (Disciplinary Rules).  Mr. Kahn declined 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 the 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. Kahn’s revocation was effective as of November 15, 2018.

ABOUT CFP BOARD

Certified Financial Planner Board of Standards, Inc. is a professional body for personal financial planners in the U.S.  CFP Board sets standards for financial planning and administers the prestigious CFP® certification – one of the most respected certifications in financial services – so that the public has access to and benefits from competent and ethical financial planning.  CFP Board, along with its Center for Financial Planning, is committed to increasing the public’s awareness of CFP® certification and access to a diverse, ethical and competent financial planning workforce. Widely recognized by firms as the standard for financial planning, CFP® certification is held by more than 83,000 people in the United States.

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

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