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Robert W Pearce
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Mr. Pearce has tried, arbitrated and mediated numerous disputes involving complex securities, commodities, administrative, contract, commercial, business tort and employment law issues for over 35 years. He has represented hundreds of clients in Federal and state courts (trial and appellate) as... More
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The Law Offices of Robert Wayne Pearce, P.A.
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The Investor's Rights Law Blog
    Dec 6, 2013 10:09 AM

    Stephen Yarkpazuo Jensen, a form broker employed by Lincoln, Nebraska-based Allstate Financial Services, LLC, has been sanctioned based on the Financial Industry Regulatory Authority's (FINRA) findings that he misappropriated a customer's funds by taking loans totaling $12,500 against her insurance policy and forging her signature to cash the checks. When the customer received a check at her home address and brought it to Mr. Jensen to return to the insurance company, Mr. Jensen forged the customer's endorsement on the check and cashed it. Several months later, Mr. Jensen changed the customer's mailing address to his office address without her knowledge or consent and applied for additional loans against the customer's policy. The loan proceeds were mailed to Mr. Jensen's office. When Mr. Jensen received each check, he forged the customer's endorsement and cashed it without her knowledge or consent. The findings also included that the customer was unaware of the loans until she telephoned the insurance carrier to check on the designation of beneficiaries on her insurance policy. When the customer went to Mr. Jensen's office to pick up documents from the insurance company indicating that there had been loans against her policy and asked Mr. Jensen for an explanation, he said that her policy had been capped but that all the money would be back in her account. FINRA found that Mr. Jensen led the customer to believe that the insurance company had unilaterally taken action in her account. Ultimately, the insurance company cancelled the loans taken against the customer's policy, and Mr. Jensen, of Redford, Michigan, was barred from association with any FINRA member in any capacity.

    Broker-dealers must establish and implement a reasonable supervisory system to protect customers from broker misconduct. If broker-dealers do not establish and implement these protective measures, they may be liable to investors for damages flowing from the misconduct. Therefore, investors who have suffered losses stemming from misappropriation of funds by their broker can bring forth claims to recover damages against broker-dealers like Allstate Financial Services, LLC, which should consistently oversee its brokers' activities in order to prevent the above-described prohibited conduct.

    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.

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