Michael John Woods, a broker formerly at New Brighton, Pennsylvania based Fortune Financial Services, Inc., submitted a Letter of Acceptance, Waiver and Consent in which he consented to the described sanctions and to the entry of the Financial Industry Regulatory Authority's (FINRA) findings that he engaged in an outside business activity without providing written notice to his firm. FINRA's findings stated that Mr. Woods obtained signature authority on the firm customer's bank account and wrote checks to pay the customer's monthly bills in exchange for fees that totaled at least $1,500. The customer was 78 years old at the time, was arthritic, and according to Mr. Woods, needed help to manage his affairs. FINRA also stated that Mr. Woods created a false document bearing the customer's photocopied signature from a variable annuity withdrawal form the customer had previously signed. Mr. Woods dated the new form and submitted the document to the annuity issuer three days after the customer died. The withdrawn monies were deposited into the customer's bank account, which Mr. Woods controlled as the trustee of the customer's trust. Mr. Woods issued checks drawn from that bank account to pay himself fees for estate services that he rendered as trustee of the trust. FINRA's findings also included that Mr. Woods willfully failed to timely disclose federal tax liens levied against him on his Form U4.
Mr. Woods, of Dexter, Michigan, was fined $20,000 and suspended from association with any FINRA member in any capacity for two years. The fine must be paid either immediately upon Mr. Woods' re-association with a FINRA member firm following his suspension or prior to the filing of any application or request for relief from any statutory disqualification, whichever is earlier. The suspension is in effect from May 6, 2013 through May 5, 2015.
Broker-dealers must establish and implement a reasonable supervisory system to protect customers from broker misconduct. If broker-dealers do not establish and implement a reasonable supervisory system, they may be liable to investors for damages flowing from the misconduct. Therefore, investors who have suffered damages due to broker misconduct can bring forth claims to recover losses against broker-dealers such as Fortune Financial Services, Inc.
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