CFP Board Censures Improper CFP® Professional Conduct

Certified Financial Planner Board of Standards, Inc. (CFP Board) announced today public disciplinary actions against the following individuals’ right to use the CFP® certification marks, effective immediately or on the date noted in each case. Public disciplinary actions taken by CFP Board, in order of increasing severity, include letters of admonition, suspensions and permanent revocations.

This release contains information about disciplinary actions relating to 13 CFP® professionals. Of these actions, there were 2 revocations, 2 suspensions, 2 interim suspensions and 7 letters of admonition.

The basis for each decision can be found in a Disciplinary Action Report below and on CFP Board’s website. The public may check on an individual’s disciplinary history and certification status with CFP Board at www.CFP.net/verify.

CFP Board’s enforcement process is a critical consumer protection. CFP® professionals agree to abide by CFP Board’s Standards of Professional Conduct (Standards), which includes the Code of Ethics and Professional Responsibility (Code of Ethics), Rules of Conduct and Financial Planning Practice Standards (Practice Standards). The Standards set forth the ethical standards for financial planners who hold the CFP® certification.

CFP Board enforces its ethical standards by investigating incidents of alleged unethical behavior, and following the procedures established in CFP Board’s Disciplinary Rules and Procedures (Disciplinary Rules). In cases where violations are found, CFP Board may impose discipline ranging from a private censure or public letter of admonition to the suspension or revocation of the right to use the CFP® marks. The Disciplinary Rules set forth a fair process for investigating matters and imposing discipline where violations have been found.

The actions in this release result from final decisions of the Disciplinary and Ethics Commission (Commission).  The Commission meets three times a year to provide a fair, unbiased review of any matter in which a CFP® professional is alleged to have committed violations of the Standards.  

The Commission functions in accordance with the Disciplinary Rules and reviews all matters on a case-by-case basis, taking into account the details specific to an individual case. While CFP Board has attempted to capture the details relevant to each decision, the summary nature of these releases may omit certain details affecting the decision. Accordingly, the decisions and/or rationale described in the releases may not apply to other cases reviewed by the Commission or reflect the Commission’s future interpretation or application of the Standards.

LETTERS OF ADMONITION

FLORIDA

Richard Happle, CFP® (Tampa): In August 2014, following a review by CFP Board’s Disciplinary and Ethics Commission, CFP Board issued a Letter of Admonition to Mr. Happle. This discipline followed the Mr. Happle’s entry into a settlement agreement with CFP Board in which he consented to CFP Board’s findings regarding a 2012 Customer Complaint and 2013 Firm Termination.  The Firm Termination stemmed from Mr. Happle’s direction to his assistant to inaccurately represent on an application to a not-for-profit professional organization servicing market analysis professionals that he had not been the subject of a customer complaint in the past five years.  The Customer Complaint involved a trading error where Mr. Happle failed to execute a trade at the time requested by the client.  Mr. Happle also provided the client with inaccurate information regarding management fee charges on the cash balance the client maintained in his account, which resulted in the client paying management fees on excess cash.  Mr. Happle consented to violations of Rules 4.4, 5.1 and 6.5 of CFP Board’s Rules of Conduct, which provided grounds for discipline pursuant to Article 3(a) of CFP Board’s Disciplinary Rules and Procedures.  Accordingly, the Commission admonished Mr. Happle with regard to the above-mentioned conduct. 

MICHIGAN

Rodney L. Clark, CFP® (Tecumseh): In August 2014, following a review by CFP Board’s Disciplinary and Ethics Commission, CFP Board issued a Letter of Admonition to Mr. Clark.  This discipline followed Mr. Clark’s entry into a settlement agreement with CFP Board in which he consented to CFP Board’s findings that: 1) he retained signed incomplete documents in 34 client files in violation of his broker-dealer’s policies; 2) he failed to direct his assistant to remove the incomplete documents from client files; and 3) his broker-dealer terminated his registration due to his retention of signed incomplete documents in client files.  Mr. Clark consented to violations of Rules 4.3, 4.4, 4.6, 5.1 and 6.5 of CFP Board’s Rules of Conduct, providing grounds for discipline pursuant to Article 3(a) of CFP Board’s Disciplinary Rules and Procedures.  Accordingly, the Commission admonished Mr. Clark with regard to the above-mentioned conduct. 

NEW HAMPSHIRE

Steven F. St. Pierre, CFP® (Manchester): In August 2014, following a review by CFP Board’s Disciplinary and Ethics Commission, CFP Board issued a Letter of Admonition to Mr. St. Pierre. This discipline followed Mr. St. Pierre’s entry into a settlement agreement with CFP Board in which he consented to CFP Board’s findings that he: 1) failed to have his wife file a business profit tax return for 2005, which resulted in her failure to report the possible gain due to the adjusted tax basis of a property; 2) failed to generate records to sufficiently document his mother’s intentions as proof of the legitimacy of a 2003 tax deferred exchange; 3) failed to seek a formal, independent third-party review of a 1031 exchange; and 4) provided financial guidance and assistance to his mother regarding Medicaid planning although he lacked the requisite knowledge and did not seek a third-party review of his advice. Mr. St. Pierre consented to violations of Rules 201, 302, 606(a), 606(b), 607 and 701 of CFP Board’s Code of Ethics, providing grounds for discipline pursuant to Article 3(a) of CFP Board’s Disciplinary Rules and Procedures.  Accordingly, the Commission admonished Mr. St. Pierre with regard to the above-mentioned conduct. 

TEXAS

Kerwyn N. Escayg, CFP® (Webster): In August 2014, following a review by CFP Board’s Disciplinary and Ethics Commission, CFP Board issued a Letter of Admonition to Mr. Escayg. This discipline followed Mr. Escayg’s entry into a settlement agreement with CFP Board in which he consented to CFP Board’s findings that, despite discussing an overall investment strategy with clients, he used discretion to execute 74 transactions in client accounts without obtaining prior written authorization from the clients and prior written acceptance of their accounts as discretionary from his firm, resulting in a 10-day Financial Industry Regulatory Authority, Inc. (FINRA) suspension.  Mr. Escayg failed to notify CFP Board of his FINRA suspension within 30 calendar days in accordance with Article 13.2 of CFP Board’s Disciplinary Rules and Procedures. The Commission determined that Mr. Escayg’s conduct violated Rules 4.3, 4.4, 5.1 and 6.5 of CFP Board’s Rules of Conduct, providing grounds for discipline pursuant to Articles 3(a), 3(d) and 3(e) of CFP Board’s Disciplinary Rules and Procedures. Accordingly, the Commission admonished Mr. Escayg with regard to the above-mentioned conduct. 

Keith D. Powell, CFP® (Austin): In August 2014, following a review by CFP Board’s Disciplinary and Ethics Commission, CFP Board issued a Letter of Admonition to Mr. Powell. This discipline followed the Commission’s determination that Mr. Powell failed to report his: 1) credit compromises to his firm and the Financial Industry Regulatory Authority, Inc. (FINRA), in violation of the firm’s policies and in violation of FINRA rules; and 2) his FINRA suspension to CFP Board, in violation of Article 13.2 of CFP Board’s Disciplinary Rules and Procedures. The Commission determined that Mr. Powell’s conduct violated Rules 5.1, 6.1 and 6.5 of CFP Board’s Rules of Conduct, providing grounds for discipline pursuant to Articles 3(a), 3(d) and 3(e) of CFP Board’s Disciplinary Rules and Procedures. Accordingly, the Commission admonished Mr. Powell with regard to the above-mentioned conduct. 

Sean C. Thomas, CFP® (Grapevine): In August 2014, following a review by CFP Board’s Disciplinary and Ethics Commission, CFP Board issued a Letter of Admonition to Mr. Thomas. This discipline followed Mr. Thomas’s entry into a settlement agreement with CFP Board in which he consented to CFP Board’s findings that he was convicted on two occasions of driving while intoxicated and once of public intoxication. In total Mr. Thomas received three alcohol related convictions within a five-year period.  The Commission determined that Mr. Thomas’ conduct violated Rule 6.5 of CFP Board’s Rules of Conduct, providing grounds for discipline pursuant to Articles 3(a) and 3(c) of CFP Board’s Disciplinary Rules and Procedures. Accordingly, the Commission admonished Mr. Thomas with regard to the above-mentioned conduct. 

VIRGINIA

Michael P. Duprey, CFP® (Alexandria): In August 2014, following a review by CFP Board’s Disciplinary and Ethics Commission, CFP Board issued a Letter of Admonition to Mr. Duprey. This discipline followed the Commission’s determination that Mr. Duprey submitted a materially false and inaccurate business expense to his former employer in violation of Financial Industry regulatory Authority, Inc. (FINRA) rules, used a personal email account to communicate with customers about business-related matters in contravention of his former employer’s written policies and without his former employer’s knowledge and authorization and violated his contractual obligations not to use his former employer’s confidential client information by diverting business to his new employer while hiding his new employer’s identity, resulting in a $400,000 award to his former employer by FINRA. The Commission determined that Mr. Duprey’s conduct violated Rules 5.1 and 6.5 of CFP Board’s Rules of Conduct, providing grounds for discipline pursuant to Articles 3(a), 3(d) and 3(e) of CFP Board’s Disciplinary Rules and Procedures. Accordingly, the Commission admonished Mr. Duprey with regard to the above-mentioned conduct. 

INTERIM SUSPENSION

PENNSYLVANIA

Gordon D. Smith (Johnstown): In September 2014, CFP Board issued Mr. Smith an automatic interim suspension of his right to use the CFP® certification marks. CFP Board issued an automatic interim suspension after discovering that the Federal Industry Regulatory Authority, Inc. (“FINRA”) issued an order that permanently barred Mr. Smith from acting in any principal capacity. Pursuant to Article 5.7 of the Disciplinary Rules and Procedures, “An interim suspension shall immediately be issued without a hearing when CFP Board Counsel receives evidence of a conviction or a professional discipline in accordance with Article 13.1 for…revocation of a financial professional license (securities, insurance, accounting or bank-related license).” Under the interim suspension order, Mr. Smith’s right to use the CFP® marks is suspended pending CFP Board’s completed investigation and possible further disciplinary proceedings. The interim suspension order became effective on September 19, 2014. 

WISCONSIN

David J. Norwood (DePere): In July 2014, CFP Board issued Mr. Norwood an automatic interim suspension of his right to use the CFP® certification marks.  CFP Board issued an automatic interim suspension after discovering that Mr. Norwood was convicted of Operating a Motor Vehicle While Intoxicated and Bail Jumping, both Class H. Felonies. Pursuant to Article 5.7 of the Disciplinary Rules and Procedures, “An interim suspension shall immediately be issued without a hearing when CFP Board Counsel receives evidence of a conviction or a professional discipline in accordance with Article 13.1 … for a felony conviction for any crime.” Under the interim suspension order, Mr. Norwood’s right to use the CFP® marks is suspended pending CFP Board’s completed investigation and possible further disciplinary proceedings.  The interim suspension order became effective on August 15, 2014. 

SUSPENSIONS

MICHIGAN

Steve D. Parrett (Escanaba):  In August 2014, following a review by CFP Board’s Disciplinary and Ethics Commission, CFP Board issued an order suspending Mr. Parrett’s right to use the CFP® certification marks for two years. This discipline followed the Commission’s findings that he drove a vehicle while intoxicated, was convicted of Operating While Intoxicated and received deferred adjudication for Operating While Intoxicated Causing Serious Injury. These charges stemmed from an incident in which Mr. Parrett’s conduct resulted in serious injuries to his passenger. The Commission determined that Mr. Parrett’s