CFP Board Censures Improper CFP® Certification Conduct
|Indiana||Michael J. Plummer||Anderson||Revocation|
|New York||Jon R. Harrison||Rochester||Suspension|
|North Dakota||Wayne E. Jorve||Oakes||Suspension|
|Pennsylvania||Adam D. Grodin||Pittsburgh||Revocation|
|Gregory A. Kernechel||Whitehall||Revocation|
|Tennessee||N. Lynn Newell||Chattanooga||Revocation|
|Texas||A. Ken Flake, Sr.||Houston||Revocation|
Public disciplinary actions taken by CFP Board, in order of decreasing severity, include permanent revocation, suspension and letters of admonition. Under terms of the revocation, Michael J. Plummer, Adam D. Grodin, Gregory A. Kernechel, N. Lynn Newell and A. Ken Flake, Sr. no longer have the right to use the CFP marks. The right of Jon R. Harrison and Wayne E. Jorve to use the CFP® marks was suspended for 18 months.
These disciplinary actions were taken by the Board of Professional Review, a board of CFP® certificants that interprets and applies CFP Board's Code of Ethics and Professional Responsibility and Financial Planning Practice Standards as well as investigates, deliberates and takes appropriate action with respect to alleged violations of the Code of Ethics or Practice Standards by CFP® certificants. The basis for each decision can be found in the attached report. Consumers can check on a planner's disciplinary history and certification status with CFP Board on the Web site.
DISCIPLINARY ACTION REPORT
Jon R. Harrison, (Rochester): In March 2005, Mr. Harrison entered into a settlement agreement with CFP Board agreeing to findings that Mr. Harrison: 1) pleaded guilty to a felony charge of leaving the scene of a fatal accident for which his license to drive was suspended and he completed a five-year probation; 2) pleaded guilty to a felony charge of operating a motor vehicle while intoxicated for which his license to drive was suspended, he paid a $1,000 fine and completed a five-year probation; 3) was terminated by his broker/dealer because he failed to disclose as required that he had been the subject of a felony conviction; 4) was charged with a felony charge of driving while intoxicated, which was reduced to a misdemeanor, for which he was convicted, paid a $1,000 fine and completed a three-year probation; and 5) falsely attested on the applicable Renewal Form that he had not been a defendant in a criminal proceeding, despite these convictions. Mr. Harrison's last conviction was in 1997. Mr. Harrison agreed to an 18-month suspension of his right to use the CFP marks, effective from April 4, 2005 through September 4, 2006.
Wayne E. Jorve (Oakes): In May 2005, CFP Board suspended Mr. Jorve's right to use the CFP certification marks for a period of 18 months after its investigation regarding a Consent Order he entered into with his state's Securities Commission. After a hearing, CFP Board found that Mr. Jorve: 1) consented to his state's Commission findings that he sold an unregistered security in the form of a promissory note on a real estate mortgage to one state resident during a time when his securities license was expired and he was not authorized to do so; 2) consented to Commission findings that he failed to register the promissory note and the real estate mortgage with his state's Securities Division as required; 3) acted in the capacity of a securities broker when he sold an unregistered security to a resident in his state during a time when he was not licensed to do so; 4) consented to a Commission discipline of a five-year period of probation and to pay a $10,000 fine, reduced to $4,000 if he did not further violate state securities laws; 5) failed to disclose the civil lawsuit on the appropriate Renewal Form as required; and 6) had his Certified Public Accountant's license suspended by his state's Board of Accountancy for six months and was ordered to pay a $500 fine related to the Consent Order he entered into with the Commission. Mr. Jorve appealed the Board's decision and the Board of Appeals affirmed the Board's findings and the discipline imposed. Mr. Jorve's suspension is effective May 17, 2005 through October 17, 2006.
Michael J. Plummer (Anderson): In February 2005, CFP Board permanently revoked Mr. Plummer's right to use the CFP marks after he failed to respond to CFP Board's Complaint investigating an Order Accepting Offer of Settlement with the National Association of Securities Dealers (NASD) wherein, without admitting or denying the allegations, he consented to findings that during a 12- day period in 2000 he engaged in outside business activities by receiving approximately $952.82 in compensation for the sale of insurance products issued through another company to seven members of the public without giving prompt written notice to his then-employer. As part of the settlement, Mr. Plummer was fined $1,000 and suspended from association with any NASD member firm for 10 business days. Mr. Plummer failed to notify CFP Board of his professional suspension within 10 calendar days as required. Because Mr. Plummer failed to respond to CFP Board's Complaint, the allegations in the complaint were deemed admitted and an order of revocation was issued.
Adam D. Grodin (Pittsburgh): In March 2005, CFP Board permanently revoked Mr. Grodin's right to use the CFP marks after Mr. Grodin failed to respond to CFP Board's Complaint investigating a Letter of Acceptance, Waiver and Consent (AWC) he entered into with the National Association of Securities Dealers (NASD) pursuant to which he was fined $51,744, including $46,744 in disgorgement of commissions received, and suspended from association with any NASD member in any capacity for 20 business days. Without admitting or denying the allegations, Mr. Grodin consented to the aforementioned sanctions and to the entry of findings that he recommended that a public customer purchase Class B mutual fund shares that were unsuitable for the customer because the customer could have purchased Class A shares that would have paid lower 12b-1 fees and would have avoided being subject to contingent deferred sales charges. Mr. Grodin failed to notify CFP Board of his professional suspension within 10 calendar days as required, and he failed to respond adequately to CFP Board requests for information as required. Because Mr. Grodin failed to respond to CFP Board's Complaint, the allegations in the complaint were deemed admitted and an order of revocation was issued.
Gregory A. Kernechel (Whitehall): In March 2005, CFP Board permanently revoked Mr. Kernechel's right to use the CFP certification marks after he failed to respond to CFP Board's Complaint investigating a Letter of Acceptance, Waiver and Consent (AWC) he entered into with the National Association of Securities Dealers (NASD), pursuant to which Mr. Kernechel, without admitting or denying the allegations, consented to accept a bar from association with any NASD member firm in any capacity, and also consented to pay restitution to customers in the total amount of $147,670. Mr. Kernechel, without admitting or denying the allegations, further consented to the entry of findings that he received a total of $147,670 from customers for the purpose of making investments but that he deposited the funds into his personal bank account and converted them for his own use without the authorization or consent of the customers, in violation of NASD Rules. Mr. Kernechel failed to notify CFP Board of his NASD bar within ten calendar days as required. CFP Board's Complaint also investigated 25 customer complaints filed against Mr. Kernechel, generally alleging misrepresentation, unauthorized transactions, conversion of funds, forgery and fraud, which settled for an amount in excess of $485,000, with three of the complaints apparently still pending at the time CFP Board issued the Complaint. Because Mr. Kernechel failed to respond to CFP Board's Complaint, the allegations in the complaint were deemed admitted and an order of revocation was issued.
N. Lynn Newell (Chattanooga): In March 2005, CFP Board permanently revoked Ms. Newell's right to use the CFP marks following an investigation of a grievance alleging that she failed to repay $155,000 she borrowed in the form of eight unsecured promissory notes she signed with the grievant. In the course of CFP Board's investigation, Ms. Newell admitted that she borrowed money she did not repay from the grievant, as well as five additional clients, for a total borrowed from clients of $382,980 during a four-year period. Ms. Newell included the unpaid loans from all the clients in two different bankruptcy proceedings. The Board of Professional Review (Board) found that Ms. Newell: 1) admitted she did not disclose material information to her clients about her finances or the intended use of the funds she borrowed; and 2) took loans from clients as late as 60 days before filing for bankruptcy. In aggravation, the Board considered the repetitiveness of Ms. Newell's conduct with several different clients.
A. Ken Flake, Sr. (Houston): In March 2005, CFP Board permanently revoked Mr. Flake's right to use the CFP marks after investigating a state Securities Board proceeding and a National Association of Securities Dealers (NASD) arbitration proceeding involving allegations that Mr. Flake failed to supervise an employee. After a hearing, the Board of Professional Review (Board) found that Mr. Flake: 1) failed to report a bankruptcy to his state Securities Commissioner, in violation of that State's rules, for which he was fined $750; 2) made a false attestation on a CFP Board Renewal Form regarding the existence of the State proceeding; 3) failed to supervise an employee's activities with client funds; 4) had his State securities license suspended for 15 days and was required to pay a $3,000 fine as a result of a disciplinary order issued by the State Securities Board finding that Mr. Flake negligently failed to establish or maintain procedures to supervise the activities of his firm's representatives; and 5) failed to notify CFP Board of his professional suspension within 10 calendar days as required.
The mission of Certified Financial Planner Board of Standards Inc. is to help people benefit from competent, professional and ethical financial planning. CFP Board owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™ and federally registered CFP (with flame logo) 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 47,000 individuals to use these marks in the United States.
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