CFP Board Imposes Public Discipline

Disciplinary actions relate to 13 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 13 current or former CFP® professionals. Of these actions, there were 4 letters of admonition, 4 suspensions, and 5 administrative revocations.

The basis for each decision can be found in the 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. That website also provides links to the Financial Industry Regulatory Authority’s (FINRA) BrokerCheck and the U.S. Securities and Exchange Commission’s (SEC) Investment Adviser Public Disclosure databases, which are free tools that may be used to conduct research on the background and experience of CFP® professionals who are subject to FINRA or SEC oversight, including with respect to employment history, regulatory actions, and investment-related licensing information, arbitrations, and complaints.

CFP Board’s enforcement process is a critical consumer protection. As part of their certification, a CFP® professional agrees to abide by CFP Board’s Code of Ethics and Standards of Conduct (Code and Standards), or its predecessor, the Standards of Professional Conduct (Standards), which included 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 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, then it may impose a sanction ranging from a private censure or 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 CFP Board has alleged that a CFP® professional has violated 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 Code and Standards, or the predecessor Standards.

LETTERS OF ADMONITION

CALIFORNIA

Jordan Davis, CFP® (San Francisco): In May 2020, the Disciplinary and Ethics Commission (Commission) and Mr. Davis entered into a settlement agreement in which Mr. Davis agreed that CFP Board would issue a Letter of Admonition. In the settlement agreement, Mr. Davis consented to findings that he converted his firm employer's funds by obtaining reimbursement for a 2014 computer purchase to which he was not entitled pursuant to the firm's Computer Equipment Purchase Assistance Program, and that he was permitted to resign from his firm in May 2018 for this conduct. Mr. Davis also consented to a finding that the Financial Industry Regulatory Authority, Inc. (FINRA) found in a September 2019 Cautionary Action Letter that his conduct with respect to the computer reimbursement violated FINRA Rule 2010, which states that "every member…shall observe high standards of commercial honor and just and equitable principles of trade." Pursuant to the settlement agreement, Mr. Davis also consented to findings that his conduct violated Rules 4.3, 5.1, and 6.5 of the Rules of Conduct, providing grounds for discipline pursuant to Article 3(a) the Disciplinary Rules and Procedures. Accordingly, the Commission issued to Mr. Davis a Public Letter of Admonition.

PENNSYLVANIA

Stephen A. Kelbick, CFP® (Blue Bell): In March 2020, the Disciplinary and Ethics Commission (Commission) and Mr. Kelbick entered into a settlement agreement in which Mr. Kelbick agreed that CFP Board would issue a Letter of Admonition. In the settlement agreement, Mr. Kelbick consented to findings that he exercised discretion over a client’s account by effecting approximately 40 transactions in 2016 without prior written authorization, and that his firm settled a complaint by the client for $24,000 in December 2016 and he was terminated from his firm for his conduct in August 2017. Mr. Kelbick also consented to a finding that the Financial Industry Regulatory Authority, Inc. (FINRA) found in a 2019 Letter of Acceptance, Waiver and Consent (AWC) that his conduct with respect to the transactions violated FINRA Rule 2510(b), which prohibits registered representatives from exercising discretion in a customer’s account without prior written approval from the customer and without the firm’s approval of the account as a discretionary account from the client. The AWC also found that Mr. Kelbick violated FINRA 2010, which requires registered representatives to observe high standards of commercial honor and just and equitable principles of trade. As part of the AWC, Mr. Kelbick consented to a suspension for 15 days and a fine for $5,000. Pursuant to the settlement agreement, Mr. Kelbick also consented to findings that his conduct violated Rules 4.3, 4.4, and 6.5 of the Rules of Conduct, providing grounds for discipline pursuant to Articles 3(a) and 3(d) the Disciplinary Rules and Procedures. Accordingly, the Commission issued to Mr. Kelbick a Public Letter of Admonition.

TEXAS

Joshua W. Strittmatter, CFP® (Fort Worth): In February 2020, the Disciplinary and Ethics Commission (Commission) issued an order in which Mr. Strittmatter received a Letter of Admonition. The Commission issued its order after determining that, during the period between April 2, 2018 and November 22, 2018, Mr. Strittmatter represented his compensation method as “Fee Only” on CFP Board’s “Find a CFP® professional” search tool when he was receiving insurance commissions, making the description inaccurate and misleading. The Commission found that Mr. Strittmatter was licensed to serve as an insurance agent, was appointed with more than two dozen insurance carriers, was actively selling insurance products, and was collecting commissions comprising 10-20% of his income. The Commission determined that Mr. Strittmatter’s conduct violated Rules 2.1 and 2.2(A) of the Rules of Conduct, providing grounds for discipline pursuant to Article 3(a) of the Disciplinary Rules and Procedures. Accordingly, the Commission issued a Letter of Admonition to Mr. Strittmatter.

WASHINGTON

Kevin L. Daniel, Jr., CFP® (Seattle): In February 2020, the Disciplinary and Ethics Commission (Commission) and Mr. Daniel entered into a settlement agreement in which Mr. Daniel agreed that CFP Board would issue a Letter of Admonition. In the settlement agreement, Mr. Daniel consented to findings that he was charged with felony harassment-threat to kill in 2018 for sending threatening text messages in 2017. In 2018, he entered a Felony Diversion Program pursuant to which he stipulated that the facts about the threats were true and sufficient to find him guilty of felony harassment-threat to kill and he agreed to pay fees in the amount of $850, complete 48 hours of community service, obtain a chemical dependency evaluation and complete any recommended treatment, complete an anger management class, and possess no guns for the term of the diversion except for hunting outside of the state. Mr. Daniel also consented to findings that, on May 9, 2019, the county probation services filed a letter with the court affirming that Mr. Daniel had completed his obligations and recommended dismissal of all charges; soon thereafter, the Court entered an Order of Dismissal. Mr. Daniel also consented to findings that he was terminated from his firm for failing to notify his firm and the Financial Industry Regulatory Authority of the charges within 30 days. Pursuant to the settlement agreement, Mr. Daniel also consented to findings that his conduct violated Rules 5.1 and 6.5 of the Rules of Conduct, providing grounds for discipline pursuant to Articles 3(a) and 3(c) the Disciplinary Rules and Procedures. Accordingly, the Commission issued to Mr. Daniel a Public Letter of Admonition.

SUSPENSIONS

FLORIDA

Christopher Haysley (Lake Mary): In December 2019, the Disciplinary and Ethics Commission (Commission) issued an order in which Mr. Haysley received a one-year suspension of his right to use the CFP® certification marks. The Commission issued its order after determining that, in August 2018, the Florida Office of Financial Regulation and Mr. Haysley entered into a Stipulation and Consent Agreement (Consent Agreement) in which Mr. Haysley consented to findings that he failed to comply with certain provisions of the Florida Administrative Code and Florida Statutes by (a) failing to maintain an accurate Form ADV; (b) failing to update the correct address for his firm on his Form U4 timely and failing to disclose that he is a licensed insurance agent; (c) failing to maintain written information about each advisory client that was the basis for making recommendations or providing investment advice to those clients; (d) recommending the purchase and sale of securities without reasonable grounds to believe the recommendations were suitable for the respective customers; and (e) failing to ensure that all contracts were dated, signed by all parties, and disclosed the appropriate advisory fee. As part of the Consent Order, Mr. Haysley agreed to cease and desist from violations of the Florida Statutes and the rules promulgated thereunder and pay an administrative fine of $12,000.00. The Commission determined that Mr. Haysley’s conduct violated Rules 4.3, 4.5 and 5.1 of the Rules of Conduct and provided grounds for discipline pursuant to Articles 3(a) and 3(d) of the Disciplinary Rules and Procedures. Accordingly, the Commission issued to Mr. Haysley a suspension for one year. Mr. Haysley’s suspension is effective from February 19, 2020 until February 19, 2021.

LOUISIANA

C. Michael Dowden (Baton Rouge): In March 2020, the Disciplinary and Ethics Commission (Commission) and Mr. Dowden entered into a settlement agreement in which Mr. Dowden agreed that CFP Board would issue a 60-day suspension of his right to use the CFP® certification marks. In the settlement agreement, Mr. Dowden consented to findings that he altered variable annuity exchange forms to supply dates for undated customer signatures using the date on which he had approved each transaction, causing his firm to create and maintain inaccurate books and records. Mr. Dowden also consented to a finding that the Financial Industry Regulatory Authority, Inc. (FINRA) found in a 2019 Letter of Acceptance, Waiver and Consent (AWC) that his conduct violated FINRA Rule 4511, and its predecessor NASD Rule 3110, which require FINRA members to make and preserve accurate books and records, and FINRA Rule 2010, which requires registered representatives to observe high standards of commercial honor and just and equitable principles of trade. As part of the AWC, Mr. Dowden consented to a suspension for two months and a fine of $10,000. Additionally, Mr. Dowden consented to findings that he failed to notify CFP Board in writing of his FINRA suspension within 30 calendar days after the date on which he was notified of the suspension. Pursuant to the settlement agreement, Mr. Dowden also consented to findings that his conduct violated Rules 4.3, 4.5, 5.1, 6.1, and 6.4 of the Rules of Conduct, providing grounds for discipline pursuant to Articles 3(a) and 3(d) the Disciplinary Rules and Procedures. Accordingly, the Commission issued to Mr. Dowden a suspension for 60 days. The suspension was effective from March 25, 2020 until May 25, 2020.

NEW YORK

Raymond A. Menna (Mount Sinai): In December 2019, the Disciplinary and Ethics Commission (Commission) issued an order in which Mr. Menna received a 45-day suspension of his right to use the CFP® certification marks. The Commission issued its order after determining that, between April 2016 and October 2017, Mr. Menna made monthly cash payments to a customer totaling $15,000 after the value of the customer’s account declined to zero as a result of customer withdrawals and trading losses. Mr. Menna did not obtain prior written authorization from his firm or the customer to make the payments, nor had Mr. Menna or the firm contributed financially to the customer’s account. The Commission also found that the same customer filed a Statement of Claim in 2017 to initiate a FINRA arbitration against Mr. Menna, which was settled by Mr. Menna and his firm for $260,000 (including a $35,000 personal contribution from Mr. Menna). The Commission further determined that the Financial Industry Regulatory Authority, Inc. (FINRA) and Mr. Menna entered into a Letter of Acceptance, Waiver and Consent (AWC), which found that Mr. Menna shared in the customer’s losses as a result of his conduct and violated FINRA Rule 2150(c)(1)(A) and FINRA Rule 2010. As part of the AWC, Mr. Menna consented to the imposition of a 45-calendar day suspension from association with any FINRA member-firm in any capacity and a fine in the amount of $5,000. The Commission further found that Mr. Menna was terminated his firm after being suspended by FINRA and he did not timely report his suspension to CFP Board. The Commission determined that Mr. Menna’s conduct violated Rules 4.3, 4.4, 5.1 of the Rules of Conduct and provided grounds for discipline pursuant to Articles 3(a), 3(d), and 3(e) of the Disciplinary Rules and Procedures. Accordingly, the Commission issued to Mr. Menna a suspension for 45 days. Mr. Menna’s suspension was effective from February 19, 2020 until April 3, 2020.

NORTH CAROLINA

James E. Armstrong, Jr. (Raleigh): In December 2019, the Disciplinary and Ethics Commission (Commission) issued an order in which Mr. Armstrong received a three-month suspension of his right to use the CFP® certification marks. The Commission issued its order after determining that Mr. Armstrong was a General Securities Representative and Principal and was delegated responsibility to review client transactions for suitability. The Commission found that Mr. Armstrong failed to reasonably supervise a subordinate by: (1) ignoring numerous red flags that indicated that the subordinate was implementing unsuitable investment recommendations in client accounts; (2) failing to investigate trade alerts concerning securities transactions that the subordinate executed in customer accounts; and (3) allowing the subordinate to increase customer’s risk tolerances to match his trading activity. The Commission further determined that the Financial Industry Regulatory Authority, Inc. (FINRA) and Mr. Armstrong entered into a Letter of Acceptance, Waiver and Consent (AWC) in November 2018, which found that Mr. Armstrong violated NASD Conduct Rule 3010(a) and FINRA Rules 3110(a) and 2010 with respect to the conduct. NASD Rule 3010(a) and FINRA Rule 3110(a) require FINRA members to establish and maintain a supervisory system that is reasonably designed to achieve compliance with applicable securities laws and regulations, and FINRA rules. There must be adequate follow-up and review when a firm's own procedures detect irregularities or unusual trading. A supervisor who is aware of red flags or irregularities cannot discharge his or her obligations by simply relying on the unverified representations of employees. FINRA Rule 2010 provides that “A member, in the conduct of its business, shall observe high standards of commercial honor and just and equitable principles of trade.” By signing the AWC, Mr. Armstrong consented to the imposition of a three-month suspension in all principal capacities and a $7,500 fine. The Commission determined that Mr. Armstrong’s conduct violated Rules 4.3, 4.6, and 5.1 of the Rules of Conduct and provided grounds for discipline pursuant to Articles 3(a) and 3(d) of the Disciplinary Rules and Procedures. Accordingly, the Commission issued to Mr. Armstrong a suspension for three months. Mr. Armstrong’s suspension was effective from February 19, 2020 until May 19, 2020.

ADMINISTRATIVE REVOCATIONS

ALASKA

Michael W. Shamburger (Anchorage): In February 2020, CFP Board issued an order permanently revoking Mr. Shamburger’s right to use the CFP® certification marks. This discipline followed Mr. Shamburger’s failure to file an Answer to CFP Board’s Complaint within the required timeframe. CFP Board’s Complaint alleged that (1) Mr. Shamburger’s firm, through him and his business partner, solicited firm clients to invest in a private placement, for which their compensation was not properly disclosed; (2) the firm, through Mr. Shamburger, made false and misleading statements in Form ADV Part 2A filings regarding the compensation it received for selling the private placement; and (3) the firm improperly received this compensation by acting as an unregistered broker-dealer. The Complaint further alleged that the firm, Mr. Shamburger, and the business partner entered into a 2019 SEC Cease and Desist Order regarding this conduct, consenting to cease and desist from any future violations of the Investment Advisers Act of 1940 and the Securities Exchange Act of 1934 and pay disgorgement of $253,784, and civil penalties of $85,000, $50,000 and $25,000, respectively. CFP Board’s Complaint further alleged that Mr. Shamburger’s conduct violated Rules 1.4, 2.1, 2.2A, 2.2B and 4.3 of the Rules of Conduct, providing grounds to discipline Respondent under Article 3(a) of the Disciplinary Rules and Procedures (Disciplinary Rules). Mr. Shamburger declined to file an Answer to the Complaint to CFP Board 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. Shamburger’s revocation was effective as of March 9, 2020.

ALASKA

Rob E. Wedel (Anchorage): In February 2020, CFP Board issued an order permanently revoking Mr. Wedel’s right to use the CFP® certification marks. Mr. Wedel had administratively relinquished his CFP® certification in February 2019. This discipline followed Mr. Wedel’s failure to file an Answer to CFP Board’s Complaint within the required timeframe. CFP Board’s Complaint alleged that (1) Mr. Wedel’s firm, through him and his business partner, solicited firm clients to invest in a private placement, for which their compensation was not properly disclosed and the firm improperly received this compensation by acting as an unregistered broker-dealer; (2) Mr. Wedel engaged in unauthorized use of the CFP® marks; and (3) Mr. Wedel failed to cooperate with CFP Board’s investigation. The Complaint further alleged that the firm, Mr. Wedel, and the business partner entered into a 2019 SEC Cease and Desist Order regarding this conduct, consenting to cease and desist from any future violations of the Investment Advisers Act of 1940 and the Securities Exchange Act of 1934 and pay disgorgement of $253,784 and and civil penalties of $85,000, $25,000, and $50,000, respectively. CFP Board’s Complaint further alleged that Mr. Wedel’s conduct violated Rules 1.4, 2.1, 2.2B, 4.3, and 6.1 of the Rules of Conduct, providing grounds to discipline Respondent under Articles 3(a) and 3(f) of the Disciplinary Rules and Procedures (Disciplinary Rules). Mr. Wedel declined to file an Answer to the Complaint to CFP Board 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. Wedel’s revocation was effective as of March 9, 2020.

CALIFORNIA

Joel D. Davidman (Los Angeles): In January 2020, CFP Board issued an order permanently revoking Mr. Davidman’s right to use the CFP® certification marks. Mr. Davidman’s CFP® certification expired on December 31, 2019. This discipline followed Mr. Davidman’s failure to file an Answer to CFP Board’s Complaint within the required timeframe. CFP Board’s Complaint alleged that Mr. Davidman initiated approximately 2,200 trades in the accounts of 27 firm customers without prior written authorization from the customers or approval from Morgan Stanley, violating Rule 4.3 of the Rules of Conduct. The Complaint also alleged that Mr. Davidman entered into an AWC with the Financial Industry Regulatory Authority (FINRA) on July 10, 2017 with respect to the conduct, resulting in FINRA imposing a 45-day suspension. Further, the Complaint alleged that, on February 15, 2018, the California Department of Insurance (Department) issued Mr. Davidman a 10-day suspension. The Complaint also alleged that Mr. Davidman failed to disclose to CFP Board the two suspensions he received from FINRA or the Department within the required 30-day time frame, and that he was terminated from his firm on June 3, 2019 regarding concerns about discretionary trades in his client’s accounts, in violation of firm policy. CFP Board’s Complaint alleged that Mr. Davidman’s conduct violated Rules 4.3, 5.1, 6.4, and 6.5 of the Rules of Conduct, providing grounds for discipline under Articles 3(a) and 3(d) of the Disciplinary Rules and Procedures (Disciplinary Rules). Mr. Davidman 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. Davidman’s revocation was effective as of February 6, 2020.

MINNESOTA

Michael Severance (Loretto): In April 2020, CFP Board issued an order permanently revoking Mr. Severance’s right to use the CFP® certification marks. CFP Board previously announced that it imposed an automatic interim suspension of the CFP® certification on Mr. Severance, which was effective as of December 31, 2019. This discipline followed Mr. Severance’s failure to file an Answer to CFP Board’s Complaint within the required timeframe. CFP Board’s Complaint alleged that Mr. Severance was terminated in December 2018 from his firm after the firm discovered that he had provided bill-paying services to a firm customer, for compensation, and that the firm customer had given a monetary gift to a family member of Mr. Severance in excess of $100, without notifying the Firm or obtaining the Firm’s approval. The Complaint further alleged that, on June 20, 2019, Mr. Severance was fined $5,000 by the Minnesota Department of Commerce for breaching his fiduciary duty, demonstrating incompetence and/or financial irresponsibility in his dealings, and failing to observe high standards of commercial honor and just and equitable principles of trade in the services he provided to his 70-year old client, all in violation of Minnesota state law. Mr. Severance was also issued a six-month suspension, which was stayed. The Complaint also alleged that, on November 22, 2019, Mr. Severance entered into a Letter of Acceptance, Waiver and Consent (AWC) with the Financial Industry Regulatory Authority (FINRA), consenting to the imposition of a permanent bar from association with any FINRA member. The AWC found that Mr. Severance refused to produce documents and information requested by FINRA staff pursuant to FINRA Rule 8210 in violation of FINRA Rule 8210 and FINRA Rule 2010, which provides that “A member, in the conduct of its business, shall observe high standards of commercial honor and just and equitable principles of trade.” CFP Board’s Complaint alleged that Mr. Severance’s conduct violated Rule 4.3 of the Rules of Conduct and Article 13.2 of the Disciplinary Rules and Procedures (Disciplinary Rules), providing grounds for discipline under Articles 3(a) and 3(d) of the Disciplinary Rules. Mr. Severance 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. Severance’s revocation was effective as of April 7, 2020.

PENNSYLVANIA

James Dresselaers (Tannersville): In January 2020, CFP Board issued an order permanently revoking Mr. Dresselaers’s right to use the CFP® certification marks. Mr. Dresselaers had administratively relinquished his CFP® certification in March 2020. This discipline followed Mr. Dresselaers’s failure to file an Answer to CFP Board’s Complaint within the required timeframe. CFP Board’s Complaint alleged that, between 2008 and 2010, Mr. Dresselaers made unsuitable recommendations on nontraditional electronically traded funds and metal and mining stocks to a client. The Commission further alleged that the Financial Industry Regulatory Authority, Inc. (FINRA) and Mr. Dresselaers entered into a Letter of Acceptance, Waiver and Consent (AWC) in August 2017, which found that Mr. Dresselaers violated NASD Conduct Rules 2310 and 2001 and FINRA Rules 2111 and 2010, suspended him for 60 days, fined him $10,000, and ordered disgorgement of commissions earned in the amount of $18,708. NASD Rule 2310 and FINRA Rule 2111 require that, when recommending the purchase, sale, or exchange of any security, a FINRA-registered person must have reasonable grounds for believing that the recommendation is suitable for the customer upon the basis of the facts, if any, disclosed by the customer as to his other security holdings and as to his financial situation and needs. FINRA Rule 2111 requires that a firm or associated person have a reasonable basis to believe a recommended transaction or investment strategy involving a security or securities is suitable for the customer, and FINRA Rule 2010 provides that “A member, in the conduct of its business, shall observe high standards of commercial honor and just and equitable principles of trade.” The Complaint also alleged that, in February 2018, Mr. Dresselaers and the Commissioner of the Securities Division of Maryland consented to findings that Mr. Dresselaers made unsuitable recommendations in violation of Maryland law and Mr. Dresselaers was ordered to permanently cease and desist, suspended from serving as an agent and investment adviser representative. Mr. Dresselaers 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. Dresselaers’s revocation was effective as of February 12, 2020.