Kale King Hoong Young, of Torrance, California, a stockbroker registered with LPL Financial LLC, has been fined $5,000.00 and suspended for 20 days from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity because Young falsified customer signatures. Letter of Acceptance, Waiver, and Consent No. 2020066352101 (June 8, 2023).
According to the AWC, through a Form U5 submission to FINRA, the securities broker dealer reported that Young was terminated for using customer signatures without authorization on account documents. FINRA’s investigation stemmed from this Form U5 submission.
FINRA found that LPL had specific supervision procedures in place during that time, which mandated that all documents have the customer’s original signature. It explicitly prohibited stockbrokers from affixing, signing, or reusing the name, initials, or signature of a customer.
Despite knowing of these written supervisory procedures, Young reused a genuine signature of customer A on three account transfer documents in September 2017. The AWC stated that in November of 2017, Young reused genuine signatures of both customer A and customer B on 15 mutual fund replacement documents. In December 2019, Young affixed customer C’s signature to a form acknowledging a life insurance policy. FINRA found that the customers did not physically sign the documents but had allowed Young to reuse or affix their signatures.
Additionally, Young falsely claimed on an annual compliance questionnaire that he did not affix or sign another person’s signature on any document.
The AWC indicated that the securities broker dealer used 18 of those fake documents to approve and record a transfer, sale, or a cash or securities disbursement from the accounts of the customers. By affixing the signatures of customers to those documents and presenting them to the securities broker dealer as the customers’ original signatures, Young violated FINRA Rule 2010. FINRA also found that Young led the firm to maintain inaccurate books and records, which is a violation of FINRA Rules 2010 and 4511 as well as Securities Exchange Act of 1934 Rule 17a-3.
Young was registered with LPL Financial LLC as a stockbroker and investment advisor representative between February 20, 2015, and April 15, 2020. He has been registered with Cuso Financial Services LP as a stockbroker and investment advisor representative since September 2, 2020.
