Margot Helen Myers, a broker employed by Scottsdale, Arizona-based Arque Capital, LTD submitted an Offer of Settlement in which she consented to, but did not admit to or deny, the described sanctions and the entry of the Financial Industry Regulatory Authority's (FINRA) findings that she falsified and forged investment advisor (IA) documents. Ms. Myers met with customers to discuss Roth and Traditional Individual Retirement Accounts (IRAs) as well as the 401(k) plan for their company. FINRA stated that the customers decided to have solely the Roth IRAs managed by an outside IA. Subsequently, one of the customers notified Ms. Myers that the IA was not managing the customers' Roth IRAs because the accounts did not contain the minimum account balances to qualify for management. Thereafter, FINRA alleged that without the customers' knowledge, consent, or authorization, Ms. Myers changed the date on the IA documents that authorized the IA to manage the customers' Roth IRAs (so it would appear they were signed on a later date), copied the documents, changed the account type from Roth IRA to 401(k) on the new copies, and changed the date to the later date on the new copies, which resulted in the creation of documents that appeared to authorize the IA to manage the customers' 401(k) accounts. The IA ultimately rejected the documents because Ms. Myers used the wrong form and the accounts did not contain the required minimum account balances. Ms. Myers allegedly printed new IA documents from a related website which would authorize the IA to manage the customer's 401(k) accounts, completed these documents, forged the customers' signatures, and submitted the documents to the IA. This caused the IA to begin managing the 401(k) accounts.
In addition, Ms. Myers allegedly completed a separate written disclosure statement, which indicated the IA would pay Ms. Myers a referral fee of up to 20 percent of the advisory fee charged and paid by the customers' company. As a result of all this, Ms. Myers, of Phoenix, Arizona, was fined $7,500 and suspended from association with any FINRA member in any capacity for five months. The suspension is in effect from August 5, 2013, through January 4, 2014.
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 account document falsifications and/or forgery by their broker can bring forth claims to recover damages against broker-dealers like Arque Capital, 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.