Abed Adam Darwish, of North Royalton, Ohio, a stockbroker formerly registered with Key Investment Services, has been fined $7,500.00 and suspended for eighteen months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that he utilized customers’ information without consent to create investment accounts and effected unauthorized changes to a customer’s beneficiary account. Letter of Acceptance, Waiver and Consent, No. 2015045720901 (June 9, 2017).
According to the AWC, in 2013, Darwish utilized BC and JC’s information to create a brokerage account held at an outside brokerage firm. Apparently, recommendations in alternative investments were made by Darwish to persuade BC and JC to fund the accounts. Apparently, the use of the customers’ information was not authorized by them for purposes of the creation of the brokerage accounts. FINRA found that Darwish’s unauthorized activities in this regard constituted a violation of FINRA Rule 2010.
The AWC further stated that customer IS was instructed by Darwish to complete a beneficiary change form in reference to the customer’s variable annuity contract. Critically, Darwish’s spouse was added by Darwish as beneficiary of fifty percent of the proceeds of the annuity. The AWC revealed that IS ultimately reached out to the firm to change the beneficiary designation after noticing Darwish’s actions.
Subsequently, Darwish’s conduct became subject of a complaint; prompting the firm to investigate his alleged misconduct. During this period, Darwish reportedly falsified information to his firm concerning the circumstances for changing the beneficiary designation on IS’s annuity. Particularly, Darwish claimed that his spouse’s name was added to IS’s beneficiary designation upon noticing that IS lacked contingent beneficiaries; however, the estate of IS’s husband was already listed on the annuity as a contingent beneficiary. FINRA found that Darwish’s conduct, which he claimed consisted of a clerical mistake, was violative of FINRA Rule 2010.
FINRA further found that Darwish led Key Investment Services to maintain records that were inaccurate and false in violation of Securities Exchange Act Section 17(a) and Rule 17a-3, as Darwish furnished documentation containing a beneficiary on IS’s annuity that was neither correct nor consented to by the customer. Darwish’s conduct was found by FINRA to be violative of Rules 2010 and 4511.
FINRA Public Disclosure reveals that on November 15, 2016, a customer initiated investment related written complaint involving Darwish’s conduct was settled to resolve allegations that he made unsuitable investment recommendations to the customer concerning the purchase of a variable annuity issued by AXA Equitable Life Insurance Company.
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