Janet Louise Frakes, a former broker at Cincinnati, Ohio based Fifth Third Securities, Inc., submitted a Letter of Acceptance, Waiver and Consent in which she consented to, but did not admit to or deny, the described sanction and the entry of the Financial Industry Regulatory Authority's (FINRA) findings that she misappropriated more than $100,000 from an elderly customer's account and $16,000 from another elderly customer's account at a bank. FINRA's findings stated that Ms. Frakes perpetrated the misappropriation of the customers' money partially by means of submitting bogus withdrawal slips. Ms. Frakes signed a customer's withdrawal slips as power of attorney (POA) on file. However, the bank had no record of a POA on file for the account. The findings also stated that FINRA sent Ms. Frakes a request for, among other things, a signed statement responding to the misappropriation allegations. Ms. Frakes' attorney sent a letter to FINRA refusing to provide a written statement. Ms. Frakes, of Independence, Kentucky, was barred from association with any FINRA member in any capacity.
Broker-dealers must establish and implement a reasonable supervisory system to safeguard customer assets. Some of the supervisory tasks related to POAs include identifying the customer, collecting signature specimens from the customer, reviewing and comparing signatures on the POA, and following up with the customer before transferring funds and securities from any clients account.
Recently, our law firm, Robert Wayne Pearce, P.A., handled a case in which Wells Fargo Advisors was negligent in its supervisory responsibilities concerning forged POAs. The arbitration panel entered an award of over $2.8 million against Wells Fargo Advisors for their negligence in failing to safeguard assets in the customer's account.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. Please see our Instablog profile (left column) for ways to contact us and get answers to any of your questions about this blog post and/or any related matter.