Jeffrey Alan Smith, of Irvine, California, a stockbroker formerly registered with Accelerated Capital Group, has been fined $5,000.00 and suspended for three months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that he utilized altered and pre-signed customer documents to effect investment transactions in customer accounts. Letter of Acceptance, Waiver and Consent, No. 2012033566202 (Sept. 5, 2017).
According to the AWC, customers were provided blank forms to sign by Smith, where he utilized several photocopies containing the customers’ signatures for purposes of effecting transactions in customer accounts. The AWC stated that Smith’s conduct caused Accelerated Capital Group to maintain records and books that were not accurate; conduct FINRA found to be violative of FINRA Rules 2010 and 4511.
FINRA Public Disclosure reveals that Smith been previously fined and suspended by FINRA for failing to supervise a Longview Financial Group branch office – a former brokerage firm that Smith was associated with. Letter of Acceptance, Waiver and Consent, No. 2010022715605 (Oct. 24, 2011). According to the AWC, seventeen of the firm’s staff were supposed to be supervised by Smith; yet Smith failed to monitor their activities.
The AWC revealed that the firm’s written procedures for supervision of private placements had not been enforced by him, where he disregarded responsibilities pertaining to the facilitation of private placement investors’ monies as well as the dissemination of subscription documentation and private placement memoranda. Apparently, the firm’s brokers bypassed LFG by submitting documents to the issuer of the private placements, which prevented a review from being conducted by the firm and also prevented the firm’s ability to retain the documents relating to customer transactions.
In addition, Smith reportedly neglected his duty to ensure that transactions were suitable for customers. Evidently, the private placement transactions that his staff facilitated were not submitted to his attention for authorization. Moreover, the AWC indicated that Smith failed to supervise the methods by which his staff communicated with customers. Consequently, FINRA found that Smith’s failure to supervise constituted violations of FINRA Rule 2010 and NASD Rule 3010.
FINRA Public Disclosure reveals that Smith has been subject of five customer initiated investment related disputes containing allegations of Smith’s misconduct while employed with Prudential Securities Incorporated, Citigroup GMI and Accelerated Capital Group. Specifically, on June 9, 1997, a customer initiated investment related arbitration claim involving Smith’s conduct was settled for $51,000.00 in damages founded on allegations including excessive commissions, misrepresentation, suitability, and breach of fiduciary duty.
On July 26, 2006, a customer initiated investment related written complaint regarding Smith’s activities was resolved for $100,000.00 in damages supported by accusations that Smith made misrepresentations pertaining to the customer’s variable annuity by misstating the annuity’s guaranteed minimum death benefit value. Subsequently, on May 2, 2007, a customer filed an investment related written complaint involving Smith’s conduct, where the customer alleged that Smith took funds from the customer’s account without permission.
Furthermore, on April 15, 2013, a customer initiated investment related civil action involving Smith’s conduct was settled for $4,000.00 in damages supported by allegations that Smith made misrepresentations to the customer concerning a promissory note investment. Then, on May 25, 2016, four customers filed investment related disputes seeking a total of $750,000.00 in damages based upon allegations including failure to supervise, fraud, breach of contract, violation of securities laws, excessive trading, breach of fiduciary duty, and negligence concerning the customers’ equity transactions.
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