CFP Board Censures Improper CFP® Certificant Conduct
CONTACT:
J. Barron Knight, Director of Professional Review
Phone: 202-379-2240
Email: [email protected]
WASHINGTON, DC, April 3, 2009 - Certified Financial Planner Board of Standards Inc. (CFP Board) today announces that it has taken public action against the following individuals' rights to use the CFP® certification marks:
| STATE | NAME | LOCATION | DISCIPLINE |
| Arizona | Alonzo Russell | Gilbert | Revocation |
| California | Larry Klein | Walnut Creek | Revocation | Kenneth G. Mosbey | Westlake Village | Suspension |
| Carlo J. Sparacino | Trabuco Canyon | Revocation | Colorado | Rick D. VanVleet | Fort Collins | Interim Suspension | Devon A. Wright | Golden | Suspension |
| Connecticut | Robert J. Fortier | Chester | Letter of Admonition |
| Georgia | Abigail M. Whittle | Roswell | Suspension |
| Germany | Barry E. Swanson | Heidelberg | Letter of Admonition |
| Hawaii | Edward T. Coda | Honolulu | Letter of Admonition |
| Indiana | Shawn Dunn | Highland | Interim Suspension |
| Kentucky | Brian A. Guilliom | Waddy | Suspension |
| Maryland | William I. Kissinger | Cockeysville | Letter of Admonition |
| James R. Klima | Columbia | Letter of Admonition | |
| New Jersey | Elliot J. Paul | Haddonfield | Suspension | Paul Perino, Jr. | Vineland | Letter of Admonition |
| Pennsylvania | Craig M. Shine | Monroeville | Revocation |
| Texas | Nicole Y. Allen | Dallas | Revocation | Mark W. Chuckran | Spring | Revocation |
| Terrence P. Riely | San Antonio | Revocation | |
| Utah | Mark R. Miller | South Jordan | Suspension |
Public disciplinary actions taken by CFP Board, in order of increasing severity, include letters of admonition, interim suspension, suspension, and permanent revocation. Letters of admonition were issued to Edward T. Coda, Robert J. Fortier, William I. Kissinger, James R. Klima, Paul Perino, Jr., and Barry E. Swanson; they retain the right to use the CFP® marks. Interim Suspensions were issued to Shawn Dunn and Rick D. VanVleet. Suspensions of 1 year were issued to Mark R. Miller, and Abigail M. Whittle. Suspensions of 1 year and 1 day were issued to Elliot J. Paul, and Devon A. Wright. A suspension of 2 years was issued to Brian A. Guilliom, and a suspension of 5 years was issued to Kenneth G. Mosbey. Revocations were issued to Nicole Y. Allen, Mark W. Chuckran, Larry Klein, Terrence P. Riely, Alonzo Russell, Craig M. Shine and Carlo J. Sparacino.
The basis for each decision can be found in the attached report. Consumers may check on a planner's disciplinary history and certification status with CFP Board at www.CFP.net.
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CFP® - The Recognized Standard of Excellence for Personal Financial Planning
April 2009
Public Letters of Admonition
CONNECTICUT
Robert J. Fortier (Chester): In November 2008, following a hearing before CFP Board’s Disciplinary and Ethics Commission (“Commission”), Mr. Fortier entered into a settlement agreement with CFP Board pursuant to which he agreed to accept and consent to a public letter of admonition which acknowledged violations of Rules 102, 201, 607, 701, 606(a) and 606(b) of CFP Board’s Code of Ethics and Professional Responsibility. Mr. Fortier also consented to CFP Board’s findings of fact which included a July 2007 Stipulation and Order signed by Mr. Fortier and the Connecticut Insurance Commissioner. Following an appeal, the July 2007 Stipulation and Order was entered into at the Connecticut Superior Court whereby Mr. Fortier was fined $3,500 and had his insurance license placed on probation for two years with certain conditions to be met. The Commission hearing and CFP Board settlement followed CFP Board’s investigation of a 2006 Connecticut Insurance Department investigation that resulted in a finding that Mr. Fortier violated state law when he placed false information on his client’s health care application. Mr. Fortier stated on the application that the client weighed 140 pounds, when the actual weight was 215 pounds; the health care insurer rescinded the client’s health insurance coverage when the false information was discovered. The July 2007 Stipulation and Order directed Mr. Fortier to make restitution to the Client for any unpaid medical expenses resulting from the cancellation of the Client’s health care policy.
GERMANY
Barry E. Swanson (Heidelberg): In July 2008, CFP Board issued Mr. Swanson a public letter of admonition related to its investigation of a Letter of Acceptance, Waiver and Consent he entered into with FINRA. After a hearing, CFP Board’s Disciplinary and Ethics Commission (“Commission”) made several findings, including: 1) Mr. Swanson’s Broker-Dealer’s Web site contained exaggerated and unwarranted claims about its representatives’ expertise and success and misrepresented the number of CFP® certificants employed; 2) Mr. Swanson failed to provide clients material information relevant to the professional relationship, including his business affiliation, address, telephone number, agency relationship of the supervising branch office, and information about six customer complaints and the suspension of his license to solicit sales on a military base; and 3) Mr. Swanson failed to establish, maintain or enforce procedures reasonably designed to ensure compliance with Department of Defense (“DOD”) regulations, failed to establish a system to retain clients’ electronic records, failed to establish an effective supervisory system designed to preclude the above-mentioned violations and consented to findings that he violated several federal securities laws, rules and regulations, and DOD regulations. The Commission found that Mr. Swanson’s conduct violated Rules 101(a), 401(a), 401(b), 606(a), 701 and 705 of CFP Board’s Code of Ethics and Professional Responsibility. Accordingly, the Commission admonished Mr. Swanson publicly with regard to the above-mentioned conduct and ordered that Mr. Swanson ensure that his Broker-Dealer’s Web site accurately reflects the number of CFP® certificants in his organization.
HAWAII
Edward T. Coda (Honolulu): In November 2008, following a hearing, Mr. Coda entered into a settlement agreement with CFP Board pursuant to which he agreed to accept a public letter of admonition. The hearing and settlement followed CFP Board’s investigation of a 2007 United States Department of Justice (“DOJ”) investigation regarding allegations that Mr. Coda and three others promoted a tax fraud program that resulted in losses exceeding $2 million to the federal treasury. In August 2007, the DOJ filed a Complaint for Permanent Injunction and Other Relief against Mr. Coda, three other individuals and two corporations. Following a hearing, CFP Board’s Disciplinary and Ethics Commission (“Commission”) found that by advising and assisting clients to purchase sham business insurance and to transfer monies to sham self-directed individual retirement accounts designed to enable the clients to reduce falsely their reported federal income tax liabilities, Mr. Coda violated Rules 102, 201 and 607 of CFP Board’s Code of Ethics and Professional Responsibility.
MARYLAND
William I. Kissinger (Cockeysville): In August 2007, CFP Board issued Mr. Kissinger a public letter of admonition related to its investigation of a United States Securities and Exchange Commission Division of Enforcement (“Division”) investigation and enforcement proceeding related to Mr. Kissinger’s sale to clients of Class B mutual fund shares. In July 2006, the Division issued an Order Imposing Remedial Sanctions which ordered Mr. Kissinger to cease and desist from committing any violations of Section 17(a)(2) and 17(a)(3) of the Securities Act of 1933 and to disgorge the amount of $36,170, plus prejudgment interest. Mr. Kissinger and the Division later settled the matter for $29,250. Following a hearing, CFP Board’s Disciplinary and Ethics Commission (“Commission”) made several findings, including: 1) Mr. Kissinger charged a client excessive fees and failed to take advantage of breakpoint discounts which would have been available had the client purchased A shares instead of B shares; 2) the Division issued an opinion that stated Mr. Kissinger acknowledged his failure to make required disclosures to clients regarding the differences between mutual fund share classes, including the differences in cost structure; and 3) the Division’s opinion stated Mr. Kissinger negligently omitted material information to customers, in violation of the Securities Act of 1933. The Commission found Mr. Kissinger’s conduct violated Rules 102, 201, 202, 402(a), 606(a), 606(b), 607, 701 and 703 of CFP Board’s Code of Ethics and Professional Responsibility. Accordingly, the Commission publicly admonished Mr. Kissinger, stating it was important that Mr. Kissinger understand that he is responsible for due diligence and that such activities cannot be delegated because clients come to Mr. Kissinger for his advice, and it is his responsibility to provide that advice in their best interest. The Commission also required Mr. Kissinger to complete an additional four hours of continuing education in ethics prior to his next renewal of CFP® certification.
James R. Klima (Columbia): In December 2007, CFP Board issued Mr. Klima a public letter of admonition following its investigation of a customer complaint to CFP Board related to his failure to notify in a timely manner the issuer of a variable annuity that his client had disclaimed her interest as beneficiary of the variable annuity and was, therefore, not entitled to receive the proceeds of the variable annuity upon her husband’s death. Following a hearing, CFP Board’s Disciplinary and Ethics Commission (“Commission”) made several findings, including: 1) Mr. Klima acknowledged he could have annuitized the existing annuity, which would have been a less costly approach for the client than purchasing a new annuity for each of the client’s children and would have avoided the early withdrawal penalties and taxable income suffered by the adult children; and 2) Mr. Klima failed to disclose the civil law suit with the client on his CFP® Certification Renewal Application as is required. The Commission found Mr. Klima’s conduct in violation of Rules 201, 202, 607, 703 and 606(b) of CFP Board’s Code of Ethics and Professional Responsibility. In arriving at this conclusion, the Commission noted that there needs to be more willingness on Mr. Klima's part to disengage with his client when issues are beyond his level of expertise. The Commission also expressed concern about what appeared to be a narrow focus in recommending annuities as a solution, stating its belief that Mr. Klima potentially sacrificed consideration of alternatives that could have been more beneficial to the clients. Accordingly, the Commission publicly admonished Mr. Klima and required that he complete twelve additional hours of continuing education during the following twelve months, including four hours each in the areas of estate planning, investments and estate distributions.
NEW JERSEY
Paul Perino, Jr. (Vineland): In December 2007, CFP Board issued Mr. Perino a public letter of admonition, following its investigation of a Consent Order (“New Jersey Consent Order”) Mr. Perino entered into with the New Jersey Bureau of Securities. Following a hearing, CFP Board’s Disciplinary and Ethics Commission (“Commission”) found that Mr. Perino’s conduct as indicated in and consented to by Mr. Perino in the New Jersey Consent Order violated Rules 606(a) and 705 of CFP Board’s Code of Ethics and Professional Responsibility. The New Jersey Consent Order stated that Mr. Perino’s broker-dealer employer conducted its annual review of his Office of Supervisory Jurisdiction (“OSJ”) and Mr. Perino received a failing grade for his supervisory responsibilities as a registered principal in 2 of 3 categories measured by the report: Compliance Interview Record Process and Supervision of Compliance Records. The report found that Mr. Perino failed to keep a copy of all financial deliverables on file, failed to review the minimum number of deliverables, failed to sign a Franchisee Financial Advisor’s Compliance Interview Record Report, and failed to intervene when the same Franchisee Financial Advisor charged excessive advisory fees which were listed on a report provided to Mr. Perino. The Franchisee Financial Advisor was subsequently sentenced to three years in prison and ordered to pay $400,000 in restitution. Pursuant to the New Jersey Consent Order, Mr. Perino was barred from acting in a supervisory capacity at any broker-dealer registered with the State of New Jersey through December 31, 2007 (six months) and was required to re-qualify to act in a supervisory capacity at any broker-dealer. Mr. Perino was also assessed a civil monetary penalty of $15,000 which was deferred based on his cooperation and demonstrated inability to pay.
Interim Suspensions
COLORADO
Rick D. VanVleet (Fort Collins): In December 2008, following a hearing by CFP Board’s Disciplinary and Ethics Commission (“Commission”), Mr. VanVleet was issued an interim suspension of his right to use the CFP® certification marks. CFP Board initiated interim suspension proceedings following Mr. VanVleet’s November 2008 guilty plea to charges of securities fraud for running a Ponzi investment scheme whereby he used money from new investors to pay existing investors, for which he is subject to a sentence of up to 24 years in prison, restitution and a fine of up to $750,000. Pursuant to Article 5.6 of CFP Board’s Disciplinary Rules and Procedures, the Commission found that Mr. VanVleet posed an immediate threat to the public and that the gravity of the nature of his misconduct impinged upon the stature and reputation of the CFP® marks. Under the interim suspension, Mr. VanVleet’s right to the use the CFP® certification marks is suspended pending a full hearing before the Commission.
INDIANA
Shawn Dunn (Highland): ): In December 2008, following a hearing by CFP Board’s Disciplinary and Ethics Commission (“Commission”), Mr. Dunn was issued an interim suspension of his right to use the CFP® certification marks. CFP Board initiated interim suspension proceedings following Mr. Dunn’s conviction on twelve felony counts of tax fraud conspiracy and three felony counts related to his individual tax returns. The convictions followed an undercover investigation by Internal Revenue Service (“IRS”) agents into a scheme to market and sell sham foreign and domestic trusts that led to the indictment of Mr. Dunn and seven other defendants. Pursuant to Article 5.6 of CFP Board’s Disciplinary Rules and Procedures, the Commission found that Mr. Dunn posed an immediate threat to the public and that the gravity of the nature of his misconduct impinged upon the stature and reputation of the CFP® marks. Under the interim suspension, Mr. Dunn’s right to the use the CFP® certification marks is suspended pending a full hearing before the Commission.
Suspensions/Delay of Certification
CALIFORNIA
Kenneth G. Mosbey (Westlake Village): In July 2008, CFP Board suspended Mr. Mosbey’s right to use the CFP® certification marks for five years after its investigation of two NASD arbitration proceedings, a civil lawsuit and a customer complaint alleging that Mr. Mosbey sold clients variable annuities comprised of equity index funds that were unsuitable, given the clients’ risk tolerance and investment needs. Following a hearing, CFP Board’s Disciplinary and Ethics Commission (“Commission”) made several findings, including: 1) Mr. Mosbey failed to disclose fundamental characteristics about variable annuities such as surrender charges, risk of loss of principal, and exposure to stock market volatility in three different client matters; 2) Mr. Mosbey made several misrepresentations to clients about their variable annuities, such as telling them the investment would be insured for the amount invested, regardless of what happened in the market; 3) Mr. Mosbey selected and sold investment products that did not match the investment objectives, risk tolerance and investment experience of the clients; and 4) Mr. Mosbey failed to comply with published standards for displaying the CFP® marks appropriately on his letterhead. The Commission found that Mr. Mosbey’s conduct violated Rules 102, 201, 601, 606(b), 607, 701 and 704 of CFP Board’s Code of Ethics and Professional Responsibility. Accordingly, the Commission suspended Mr. Mosbey’s right to use the CFP® certification marks for five years and ordered that Mr. Mosbey re-take the CFP® Certification Examination as a condition of reinstatement. Mr. Mosbey’s suspension is effective from September 10, 2008 to September 10, 2013.
COLORADO
Devon A. Wright (Golden): In November 2008, following a hearing, Ms. Wright entered into a settlement agreement with CFP Board pursuant to which she consented to accept a suspension of her right to use the CFP® certification marks for one year and one day and acknowledged her violation of Rule 607 of CFP Board’s Code of Ethics and Professional Responsibility. The hearing and settlement followed CFP Board’s investigation of criminal proceedings resulting from Ms. Wright’s felony and misdemeanor convictions related to her involvement in a car accident in December 2006. The accident took place two blocks from Ms. Wright’s home. She left the scene of the accident and walked home with her son, who had sustained a broken nose in the accident. After a hearing, CFP Board’s Disciplinary and Ethics Commission (“Commission”) found that as a result of Ms. Wright’s conviction for leaving the scene of an accident with serious injury, a felony, and driving under the influence, a misdemeanor, she engaged in conduct which reflects adversely on her integrity or fitness as a CFP® certificant, upon the CFP® marks, and upon the profession, in violation of Rule 607 of CFP Board’s Code of Ethics. Additionally, the Commission found that Ms. Wright failed to notify CFP Board of her criminal convictions within ten calendar days, as required by Article 12.2 of CFP Board’s Disciplinary Rules and Procedures. Ms. Wright’s suspension is effective from November 7, 2008 to November 8, 2009.
GEORGIA
Abigail M. Whittle (Roswell): In April 2008, following a hearing, Ms. Whittle entered into a settlement agreement with CFP Board pursuant to which she agreed to accept a one year suspension of her right to use the CFP® certification marks, and consented to the findings of fact and violations of Rules 102, 201, 202, 406, 501(a), 606(a) and 607 of CFP Board’s Code of Ethics and Professional Responsibility. Ms. Whittle consented to the following facts: the hearing and settlement resulted from CFP Board’s investigation of Ms. Whittle’s impersonation of a client over the telephone while facilitating the transfer of the client’s account to Ms. Whittle’s Broker-Dealer. Ms. Whittle’s client completed paperwork to transfer her account, but the client’s new account did not have an account number. Once an account number was assigned to the new account, Ms. Whittle contacted the former Broker-Dealer to provide the account number so that the account could be transferred and was advised that the firm could only take the information regarding the account from the client. Later that day, Ms. Whittle again contacted the former broker dealer and impersonated the client, without the client’s knowledge or consent. Ms. Whittle’s suspension is effective from April 4, 2008 to April 4, 2009.
KENTUCKY
Brian A. Guilliom (Waddy): In December 2008, following review by CFP Board’s Appeals Committee, CFP Board suspended Mr. Guilliom’s right to use the CFP® certification marks for two years. The Appeals Committee heard the appeal of an April 2008 decision by CFP Board’s Disciplinary and Ethics Commission (“Commission”) to issue Mr. Guilliom a two-year suspension. The Commission’s decision followed an investigation of a complaint filed against Mr. Guilliom by the Department of Financial Institutions for the State of Kentucky. The Commission found that Mr. Guilliom and his company violated the Kentucky Securities Act through improper loan arrangements with clients, including: 1) convincing a client to rollover her 401(k) retirement account to his company’s 401(k) plan, depositing the funds in his company’s general checking account, and arranging a loan to the client from funds in that checking account; and 2) convincing a client to use 401(k) retirement account funds to purchase a promissory note reflecting a loan Mr. Guilliom’s company made to a second client, then converting for his personal use funds received from loan repayments made by the second client before eventually depositing the funds in the first client’s IRA account. The Commission found that this conduct violated Rules 102, 103(d), 201, 202, 301, 302, 402, 403, 606(a), 606(b) and 607 of CFP Board’s Code of Ethics and Professional Responsibility and sanctioned Mr. Guilliom with a two-year suspension of his right to use the CFP® marks. Mr. Guilliom appealed the Commission’s decision, which was affirmed by CFP Board's Appeals Committee. Mr. Guilliom’s suspension is effective from December 3, 2008 to December 3, 2010.
NEW JERSEY
Elliot J. Paul (Haddonfield): In November 2008, CFP Board suspended Mr. Paul’s right to use the CFP® certification marks for one year and one day, following its investigation of a Consent Order Mr. Paul entered into with the New Jersey Department of Banking and Insurance. After a hearing, CFP Board’s Disciplinary and Ethics Commission (“Commission”) made several findings, including : 1) in a Consent Order, Mr. Paul consented to findings that he: violated New Jersey regulations by making misleading communications to the public, failing to identify himself as an insurance producer when conducting financial planning seminars at which he discussed insurance products, failing to register his seminar names, offering improper inducement to seminar attendees in the form of a certificate to be used toward a reduced financial planning fee, and failing to submit a branch office registration form before business was conducted from that office; and 2) Mr. Paul made a misleading statement to CFP Board by affirming on his CFP® Certification Renewal Application that he had not been a defendant or respondent in a governmental agency proceeding or a subject of a governmental investigation or inquiry, even though he had signed the Consent Order. In addition, Mr. Paul failed to respond to CFP Board’s Complaint and Amended Complaint and did not participate in the Commission’s hearing. The Commission found that this conduct violated Rules 101(b), 606(a), 606(b), 607 and 612 of CFP Board’s Code of Ethics and Professional Responsibility. Mr. Paul’s suspension is effective from November 7, 2008 to November 8, 2009.
UTAH
Mark R. Miller (South Jordan): In May 2008, following a hearing, Mr. Miller entered into a settlement agreement with CFP Board pursuant to which he agreed to a suspension of his right to use the CFP® certification marks for a period of one year, and consented to CFP Board’s findings of fact and his violations of Rules 102, 201, 606(a) and 606(b) of CFP Board’s Code of Ethics and Professional Responsibility. The hearing and settlement followed CFP Board’s investigation of a criminal proceeding and FINRA investigation. The Disciplinary and Ethics Commission (“Commission”) found that in September of 2003, Mr. Miller asked a new client to sign a blank sheet of paper so that Mr. Miller could later transfer the client’s signature to a client account form. For this conduct, Mr. Miller was subsequently terminated by his employer and convicted by the State of Utah of forgery, which was reduced to a Class A misdemeanor. Mr. Miller’s suspension is effective from April 4, 2008 to April 4, 2009.
Revocations
ARIZONA
Alonzo Russell (Gilbert): In August 2007, CFP Board permanently revoked Mr. Russell’s right to use the CFP® certification marks. This action followed CFP Board’s investigation of a Letter of Acceptance, Waiver and Consent (“AWC”) that Mr. Russell entered into with FINRA, wherein, without admitting or denying FINRA’s findings, he agreed to findings that he failed to respond to a FINRA request for documents and information. As part of the AWC, Mr. Russell also agreed to be barred from association with any FINRA member in any capacity. After a hearing before a panel of the Disciplinary and Ethics Commission (“Commission”), the Commission found that Mr. Russell failed to notify CFP Board of his professional bar within ten calendar days as required by Article 12.2 of the Disciplinary Rules and Procedures. This conduct violated Rules 606(b) of CFP Board’s Code of Ethics and Professional Responsibility as well as Articles 3(a) and 3(g) of the Disciplinary Rules