CFP Board Censures Improper CFP® Certificant Conduct
J. Barron Knight, Director of Professional Review
WASHINGTON, DC, April 6, 2009 - Certified Financial Planner Board of Standards Inc. (CFP Board) announced that it has taken public action against the following individuals' rights to use the CFP® certification marks:
|Georgia||Joseph R. Rollins||Atlanta||Suspension||Pennsylvania||David V. Erickson||Chambersburg||Suspension|
Public disciplinary actions taken by CFP Board, in order of increasing severity, include letters of admonition, interim suspension, suspension, and permanent revocation. Suspensions of 1 year were issued to Carol E. Dixon, Joseph R. Rollins, and David V. Erickson. A suspension of 1 year and 1 day was issued to C. W. Biggs. The basis for each decision can be found in the attached report. Consumers may check on a planner’s disciplinary history and certification status with CFP Board at www.CFP.net.
The basis for each decision can be found in the attached report. Consumers may check on a planner's disciplinary history and certification status with CFP Board at www.CFP.net.
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Joseph R. Rollins (Atlanta): In August 2007, CFP Board suspended Mr. Rollins’ right to use the CFP® certification marks for one year and one day following its investigation of two civil lawsuits alleging that Mr. Rollins had recommended unsuitable investments with respect to his clients’ retirement portfolios. One lawsuit concluded with a jury award of $432,000 in compensatory damages and $22,000 in restitution for the fees paid to Mr. Rollins, and the second lawsuit concluded with a settlement of $170,000. After a hearing, CFP Board’s Disciplinary and Ethics Commission (“Commission”) affirmed the claims in both civil lawsuits, which included the following allegations: 1) Mr. Rollins obtained full discretionary authority over a retired client’s investment account and invested the funds in speculative growth funds, despite the client’s stated conservative risk tolerance and need for income-producing investments; 2) when a client questioned Mr. Rollins about investment choices he made in the client’s portfolio, Mr. Rollins misrepresented the risk of those investments; 3) Mr. Rollins obtained full discretionary authority over the portfolio of a client nearing retirement and invested the client’s assets in aggressive mutual funds unsuitable for the client’s stated objective of preservation of principal; 4) Mr. Rollins transferred a client’s existing annuity, incurring an $18,000 penalty, despite warnings from the client’s CPA; and 5) despite a client’s written request to stop conducting transactions in the client’s accounts, Mr. Rollins subsequently implemented more than $50,000 in transactions in that client’s accounts. The Commission found this conduct violated Rules 103(e), 201, 202, 606, 607, 701 and 703 of CFP Board’s Code of Ethics and Professional Responsibility as well as Article 3(a) of CFP Board’s Disciplinary Rules and Procedures. Mr. Rollins’ suspension was effective from September 2, 2007 to September 3, 2008.
David V. Erickson (Chambersburg): In September 2007, following a hearing before a panel of the Disciplinary and Ethics Commission (“Commission”), Mr. Erickson entered into a settlement agreement with CFP Board pursuant to which he agreed to accept a one year suspension of his right to use the CFP® certification marks, and consented to CFP Board’s findings of fact and violations of Rules 102, 201, 202, 401(a), 607, and 609 of CFP Board’s Code of Ethics and Professional Responsibility. The hearing and settlement followed CFP Board’s investigation of a grievance filed against Mr. Erickson by a married couple. The Commission found that: 1) Mr. Erickson had an intimate relationship with a client, the wife, during the time he advised the couple about financial planning; 2) Mr. Erickson advised the wife to transfer the assets from their joint tenancy brokerage account to an individual account without also advising the husband about the recommended transfer; 3) Mr. Erickson drew up transfer paperwork for the joint tenancy account, sent it to the wife, and she asked her husband to sign the transfer paperwork; 4) Mr. Erickson exploited the wife’s trust and vulnerability and created a conflict of interest, which he did not disclose to the couple, regarding the financial advice he provided to the wife; 5) Mr. Erickson admitted, in an e-mail to the wife, that he had taken advantage of her; and 6) Mr. Erickson advised the couple on tax questions and completed their taxes for them, but did not sign the return as a tax preparer, instead putting “self-prepared” on the form. The Commission expressed particular concern about the conflict that arose when Mr. Erickson continued to represent himself as the financial planner for the couple while having an affair with the wife, and ostensibly assisting the wife in pre-divorce planning and moving assets from a joint tenancy account into a separate account. The Commission was also troubled by Mr. Erickson’s poor of judgment in preparing a tax return but not signing it as preparer. As part of the settlement agreement, Mr. Erickson agreed to provide confirmation from his Broker-Dealer that he has been subject to heightened supervision during the period of his suspension. Mr. Erickson’s suspension was effective from September 7, 2007 to September 7, 2008.
C. W. Biggs (Denton):In January 2008, following a hearing, Mr. Biggs entered into a settlement agreement with CFP Board pursuant to which he agreed to a suspension of his right to use the CFP® certification marks for a period of one year and one day, and consented to the findings of fact and violations of Rules103(b), 103(c), 103(d), 103(e), 201, 401(a), 401(b) and 607 of CFP Board’s Code of Ethics and Professional Responsibility. The hearing and settlement followed CFP Board’s investigation of an Agreed Order Mr. Biggs entered into with the Texas Savings and Loan Department (“TSLD”). The Commission agreed with the conclusions of the TSLD investigation and found that: 1) Mr. Biggs committed multiple violations of the Mortgage Broker License Act and TSLD Rules when he entered into transactions with persons experiencing financial distress in which they conveyed their homesteads to him with the understanding that he would permit these individuals to continue to reside in the property, subject to their agreement to pay rent, and the understanding that Mr. Biggs would reconvey the property to them at some time; 2) Mr. Biggs did not in all cases document the details of the transactions; and 3) Mr. Biggs borrowed money from third party lenders to finance his acquisition of the properties and, at the closing for the loans, had money from the closing diverted to him using business entities that he controlled. The Commission considered that Mr. Biggs cooperated with TSLD during its investigation, and had taken voluntary steps to work with the original owners to assist them in the reconveyance or appropriate resolution of the remaining transactions. The Commission also considered that TSLD imposed a suspension and a fine after its investigation. TSLD suspended Mr. Biggs’ mortgage broker license from August 1, 2005 through February 19, 2006 and fined him $7,500. Although Mr. Biggs disclosed the suspension of his mortgage license to CFP Board on a CFP® Certification Renewal Application, he failed to notify CFP Board of his professional suspension within ten calendar days as required by Article 12.2 of CFP Board’s Disciplinary Rules and Procedures. Mr. Biggs’ suspension was effective from December 14, 2007 to December 15, 2008.