The rep also falsified powers of attorney for his parents, who
were clients, FINRA says.
The Financial Industry Regulatory Authority
suspended an ex-State Farm representative for one year from association with
any FINRA member in all capacities for allegedly forging the signatures of his
parents, who were clients, falsifying power of attorney forms and impersonating
his father on the phone, according to FINRA.
Without admitting or denying the findings,
Steven Todd Gary signed a letter of acceptance, waiver and consent April 21 in
which he agreed to FINRA’s suspension and a $12,500 fine. FINRA accepted the
letter Friday.
State Farm and Gary did not immediately
respond to requests for comment Monday.
In March 1998, Gary became registered as a
Series 6 investment company and variable contracts products limited
representative with FINRA-regulated broker-dealer State Farm VP Management
Corp., according to the regulator. Gary was registered with the firm until
October 2018. While associated with State Farm, Gary was employed by its
affiliated insurance company, FINRA said in the AWC letter.
On Oct. 19, 2018, State Farm filed a Form U5
reporting that Gary’s association with it was terminated Oct. 12, 2018 after an
internal review concluded that Gary “was not following internal processes”
related to life insurance policy loans, FINRA said, quoting the firm.
From April 2010 through January 2018, Gary
violated FINRA Rule 2010 (governing standards of commercial
honor and principles of trade) by forging the signature endorsements of his
parents on about 60 checks totaling $332,650, which represented loans on their
life insurance policies, according to FINRA. Gary’s parents, who held a
securities account with the firm, also owned life insurance policies issued by
its affiliated insurance company and Gary was the insurance agent responsible
for the policies, the FINRA AWC letter noted. After Gary endorsed the checks by
signing his parents’ names on the back, he then deposited the checks into his
personal bank account, according to FINRA.
In April 2018, Gary violated Rule 2010 by
providing three falsified and backdated power of attorney forms for his parents
and wife to his insurance company employer during an investigation into Gary’s
forgery, the FINRA AWC letter claimed. Gary also arranged for two employees in
his office to sign witness certifications that falsely attested that the power
of attorney forms had been executed in 2013 and 2015, according to FINRA.
In April and May 2018, Gary also violated Rule
2010 by impersonating his father during at least three calls with the bank
affiliated with his insurance company employer, FINRA said. During those calls,
“Gary misrepresented that he was his father in order to request monetary
transfers from his father’s bank account to Gary’s bank account,” according to
FINRA, which noted Gary engaged in that conduct with his father’s knowledge and
consent.
Gary has not been affiliated with any FINRA
member firm since he departed State Farm in 2018, according to his profile on
FINRA’s BrokerCheck website, which also says he is not currently
registered as a broker or RIA. There were no disclosures cited on his profile
for the entire course of his 20 years at State Farm.
However, as of Monday afternoon, Gary’s LinkedIn
profile indicated that he was still affiliated with State
Farm.
Jeff Berman joined the ThinkAdvisor team as a
staff reporter in July 2019. Before joining ThinkAdvisor, he was a freelance
reporter for five years, covering mainly technology, business, media and
entertainment news for publications including The Miami Herald, Newsday,
TheStreet.com, Long Island Press and multiple American City Business Journals
websites. He also reported for several consumer electronics publications and
was a technology reporter for publications of the Media & Entertainment
Services Alliance. Prior to that, he worked as a reporter and editor for
Consumer Electronics Daily and other Warren Communications News publications
for 15 years. He graduated with an MA in journalism from New York University.
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