William Fredrick Kerschbaumer, Jr., of Carrollton, Ohio, was fined $12,500.00 and suspended from associating with any Financial Industry Regulatory Authority (FINRA) member firm in any capacity after consenting to findings that he forged his firm customer’s signatures and made misrepresentations to customers and his firm concerning annuity terms. Letter of Acceptance, Waiver and Consent, No. 201404827601 (Aug. 26, 2016).
According to the AWC, between May 1, 2013 and September 1, 2013, at a time when Kerschbaumer was registered with Allstate, he had forged customer documents pertaining to investment accounts. Particularly, in May of 2013, customer KW’s signature had been forged by Kerschbaumer on the firm’s two distribution forms pertaining to the customer’s variable annuity, without KW providing Kerschbaumer with the requisite consent or even having knowledge of such. The AWC stated that Kerschbaumer forged KW’s signature on another letter in August 2013, in which he requested to an issuing insurance entity that the customer’s insurance rider on an annuity be restored.
The AWC reported that Kerschbaumer also forged customer CD’s signature on a May 2013 form which called for a distribution to be made from CD’s account. Apparently, CD neither had consented to such signature, nor knew about it. FINRA found that Kerschbaumer’s forgery conduct was violative of FINRA Rule 2010.
FINRA additionally found that Kerschbaumer’s forgery of the aforementioned annuity forms led Allstate’s records and books to be inaccurate and in violation of Securities Exchange Act Section 17a-3 and 17a-4. In turn, FINRA found that Kerschbaumer’s conduct was violative of FINRA Rules 2010 and 4511.
Finally, Kerschbaumer was found to have made misrepresentations to customers in 2008 and 2014. In July of 2008, Kerschbaumer reportedly made representations to customers DH and BH regarding their annuity contributions, in which he apparently claimed that such contributions would be part of the same surrender schedule (penalty period) as the customer’s initial contributions, when such was not the case. Kerschbaumer’s misrepresentations in this regard were deemed by FINRA to be violative of NASD Rule 2110.
Finally, Kerschbaumer claimed to his firm in June of 2014 that he never viewed or drafted the aforementioned May 2013 letter calling for a distribution from CD’s account. FINRA found such statement to be false, as Kerschbaumer drafted and signed CD’s name on such document. Kerschbaumer was found to have violated FINRA Rule 2010 in this regard.
Public disclosure records reveal that Kerschbaumer has been subject to five disclosure incidents. On January 31, 2013, Kerschbaumer was named in a customer dispute in which $10,750.00 in damages was claimed by the customer in connection with allegations of misrepresentations in variable annuity transactions. On September 5, 2014, Kerschbaumer settled a customer dispute in which the customer received $2,000.00 after alleging forgery on annuity withdrawal forms.
On September 8, 2014, Kerschbaumer settled a customer dispute for $25,000.00 after a customer alleged that Kerschbaumer converted the customer’s funds, in addition to making misrepresentations and committing forgery. Allstate terminated Kerschbaumer on September 11, 2014, in connection with his misconduct.
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