CFP Board Imposes Public Sanctions on 12 Individuals

Certified Financial Planner Board of Standards, Inc. (CFP Board) announced today public sanctions against 12 current or former CFP® professionals, effective immediately or on the date noted in each case. Public sanctions taken by CFP Board, in order of increasing severity, include Public Censures, Suspensions, Temporary Bars, Permanent Bars and Revocations of the right to use the CFP® marks.

CFP Board’s Enforcement Process

As part of their certification, CFP® professionals make a commitment to CFP Board to abide by CFP Board’s Code of Ethics and Standards of Conduct (Code and Standards) or its predecessor, the Standards of Professional Conduct (Standards), which included the Code of Ethics and Professional Responsibility, Rules of Conduct and Financial Planning Practice Standards. Individuals on the pathway to CFP® certification make a commitment to abide by CFP Board’s Pathway to CFP® Certification Agreement (Pathway Agreement).

CFP Board’s Procedural Rules set forth the process for investigating matters and imposing sanctions where violations have been found.

CFP Board enforces its ethical standards by investigating alleged violations and, where there is probable cause to believe there are grounds for sanction, presents a Complaint containing the alleged violations to CFP Board’s Disciplinary and Ethics Commission (Commission). The Commission meets at least six times a year to review any matter in which CFP Board has alleged that a CFP® professional has violated CFP Board’s Code and Standards or its predecessor Standards, or an individual pursuing initial CFP® certification has violated the Pathway Agreement. The Commission functions in accordance with the Procedural Rules and reviews all matters on a case-by-case basis, considering the details specific to an individual case. If the Commission determines there are grounds for sanction, then it may impose a sanction. Commission orders may be appealed by a Respondent or CFP Board pursuant to the Procedural Rules.

In certain circumstances, such as when a CFP® professional is in default due to failure to acknowledge receipt of a Notice of Investigation or file an Answer, CFP Board staff must deliver an Administrative Order of Suspension, Temporary Bar, Revocation or Permanent Bar. Administrative Orders are subject to appeal.

More information on CFP Board’s enforcement process can be found at CFP.net/enforcement. In addition, at CFP.net/verify, CFP Board provides the public with:

• An individual’s CFP Board disciplinary history and CFP® certification status.
• Links to other sources of information about CFP® professionals that may be more recent or that may contain information that has not led to CFP Board discipline and does not appear on CFP Board’s website. This information may include customer disputes, disciplinary actions taken by a regulator or employer, certain criminal matters and certain financial matters (such as bankruptcy proceedings and unpaid judgments or liens).
• Links to the Financial Industry Regulatory Authority’s (FINRA’s) BrokerCheck and the U.S. Securities and Exchange Commission’s (SEC’s) Investment Adviser Public Disclosure databases for individuals who are subject to FINRA or SEC oversight.

The Public Sanctions on 12 Individuals

A short summary of each sanction can be found below.

PUBLIC CENSURE

FLORIDA

Eric Joseph Filimon, CFP® (Orlando, Florida): In December 2022, the Disciplinary and Ethics Commission (Commission) and Mr. Filimon entered into a Consent Order in which Mr. Filimon agreed that CFP Board would issue a Public Censure. In the Consent Order, Mr. Filimon consented to findings that he was terminated from his firm in November 2021 for marking solicited trades as unsolicited in his firm’s books and records, despite having recommended the trades to his client. Pursuant to the Consent Order, Mr. Filimon also consented to findings that his conduct violated Standards D.2.a. and E.3.j. of the Code of Ethics and Standards of Conduct, which, respectively, require a CFP® professional to comply with the policies and procedures of his firm and to provide written notice to CFP Board within 30 calendar days after the CFP® professional has been terminated for cause. The Commission issued to Mr. Filimon a Public Censure.

NORTH CAROLINA

Franklin J. McElroy, CFP® (Cornelius, North Carolina): In October 2022, the Disciplinary and Ethics Commission (Commission) and Mr. McElroy entered into a Consent Order in which Mr. McElroy agreed that CFP Board would issue a Public Censure and remedial work. In the Consent Order, Mr. McElroy consented to findings that he failed to timely pay taxes to the Internal Revenue Service (IRS) for nine years between 2012 and 2020, resulting in tax debts of approximately $338,000 and the IRS filing four federal tax liens. The Commission determined that Mr. McElroy’s conduct violated Rule 6.5 of the Rules of Conduct and Standard E.2 of the Code of Ethics and Standards of Conduct, which provide that a certificant shall not engage in conduct that reflects adversely on his integrity or fitness as a certificant, upon the CFP® marks or upon the profession. Mr. McElroy entered into an installment agreement with the IRS in August 2021 and is current with that agreement. Mr. McElroy agreed to perform remedial work in addition to the Public Censure. Mr. McElroy is required to provide annual reports to CFP Board for three years evidencing that he is complying with his installment agreement, is current on his taxes and has incurred no new liens. Any failure to comply with the reporting requirement shall be considered a default, as defined by Article 11.4 of the Procedural Rules, with Mr. McElroy subject to an Administrative Order of Suspension for one year and one day. Accordingly, the Commission issued to Mr. McElroy a Public Censure with remedial work.

TEMPORARY BAR

CALIFORNIA

Gregg W. Whelan (Newport Beach, California): In September 2022, CFP Board issued an administrative order temporarily barring Mr. Whelan from applying for or obtaining the CFP® certification marks for one year and one day. This sanction followed Mr. Whelan’s relinquishment of his certification and failure to acknowledge receipt of CFP Board’s Notice of Investigation, as required by Article 1.1 of the Procedural Rules. CFP Board sought to investigate the circumstances surrounding a civil suit. Mr. Whelan’s conduct may have violated Rule 6.5 of the Rules of Conduct, which provides that a CFP® professional may not engage in conduct that reflects adversely on the CFP® professional, the CFP® marks or the profession. Under Article 4.1.a. of the Procedural Rules, Mr. Whelan has been deemed in default, and CFP Board issued an Administrative Order of Temporary Bar. Mr. Whelan’s administrative temporary bar was effective as of October 10, 2022.

PERMANENT BAR

MINNESOTA

Travis W. Hansberger (Wayzata, Minnesota): In August 2022, CFP Board issued an order in which Mr. Hansberger received a permanent bar from applying for or obtaining the CFP® certification marks. This sanction followed an appeal of an April 2022 Administrative Order of Permanent Bar issued by CFP Board. Mr. Hansberger’s CFP® certification had expired previously on September 30, 2021. The Appeals Commission of CFP Board affirmed CFP Board’s finding that Mr. Hansberger failed to file an Answer to CFP Board’s Complaint within the required time frame. The Appeals Commission also affirmed the finding that, after conducting an investigation that included an oral examination of Mr. Hansberger, CFP Board filed a Complaint alleging that he: (1) failed to act in his client’s best interest when he recommended and executed trades implementing unsuitable investments; (2) failed to oversee his client’s retirement funds, despite his commitment to do so in the Advisory Agreement; (3) neglected to meet or speak with his client over the entire period that her investments were losing value; (4) failed to schedule annual portfolio reviews to consider whether the client’s current holdings matched her goals and priorities; and (5) failed to update and reallocate the client’s portfolio based upon the change in risk and decline in value of her holdings. The Appeals Commission further affirmed that CFP Board’s Complaint alleged that Mr. Hansberger’s conduct violated Rules 4.4 and 4.5 of the Rules of Conduct, which, respectively, require CFP® professionals to exercise reasonable and prudent professional judgment in providing professional services and to make and implement only recommendations that are suitable for the client. In addition, the Appeals Commission affirmed that Mr. Hansberger failed to file an Answer to CFP Board’s Complaint within 30 calendar days of the date of service, as required by Article 3.2 of the Procedural Rules. The Appeals Commission affirmed that, under Article 4.1.b. of the Procedural Rules, Mr. Hansberger has been deemed in default and affirmed CFP Board’s issuance of an Administrative Order of Permanent Bar. Pursuant to the decision of the Appeals Commission, Mr. Hansberger’s administrative permanent bar was effective as of August 15, 2022.

NEW MEXICO

Timothy J. Prouty (Albuquerque, New Mexico): In September 2022, CFP Board issued an administrative order permanently barring Mr. Prouty from applying for or obtaining the CFP® certification marks. This sanction followed Mr. Prouty’s relinquishment of his certification and failure to file an Answer to CFP Board’s Complaint within the required time frame. CFP Board alleged that Mr. Prouty failed to cooperate with CFP Board’s investigation of his termination from his firm after allegations that he submitted transactions under production numbers that were inconsistent with an agreement with another representative, resulting in a shortfall of revenue credited to the other representative. In May 2022, Mr. Prouty entered into a Letter of Acceptance, Waiver and Consent with the Financial Industry Regulatory Authority (FINRA), in which he consented to a permanent bar and findings that he failed to produce information and documents requested by FINRA. CFP Board’s Complaint alleged that by refusing to provide documents and information requested by CFP Board, Mr. Prouty violated his duty to cooperate with CFP Board, under Section k of the Terms and Conditions of Certification and Trademark License. Mr. Prouty failed to file an Answer to CFP Board’s Complaint within 30 calendar days of the date of service, as required by Article 3.2 of the Procedural Rules. Under Article 4.1.b. of the Procedural Rules, Mr. Prouty has been deemed in default, and CFP Board issued an Administrative Order of Permanent Bar. Mr. Prouty’s administrative permanent bar was effective as of October 17, 2022.

PENNSYLVANIA

James J. O’Boyle (Plains, Pennsylvania): In October 2022, CFP Board issued an administrative order permanently barring Mr. O’Boyle from applying for or obtaining the CFP® certification marks. This sanction followed Mr. O’Boyle’s relinquishment of his certification and failure to file an Answer to CFP Board’s Complaint within the required time frame. CFP Board alleged that Mr. O’Boyle failed to cooperate with CFP Board’s investigation into an outstanding federal tax lien by refusing to respond to CFP Board’s requests for information. CFP Board’s Complaint alleged that Mr. O’Boyle’s conduct violated Section k of the Terms and Conditions of Certification and Trademark License, in which he agreed to fully cooperate with CFP Board with respect to any potential ground for imposition of a sanction, including but not limited to any investigation or proceeding initiated by CFP Board pursuant to the Procedural Rules. Mr. O’Boyle failed to file an Answer to CFP Board’s Complaint within 30 calendar days of the date of service, as required by Article 3.2 of the Procedural Rules. Under Article 4.1.b. of the Procedural Rules, Mr. O’Boyle has been deemed in default, and CFP Board issued an Administrative Order of Permanent Bar. Mr. O’Boyle’s administrative permanent bar was effective as of November 15, 2022.

Fred D. Rouse III (Dresher, Pennsylvania): In September 2022, CFP Board issued an administrative order permanently barring Mr. Rouse from applying for or obtaining the CFP® certification marks. This sanction followed Mr. Rouse’s relinquishment of his certification and failure to file an Answer to CFP Board’s Complaint within the required time frame. CFP Board alleged that Mr. Rouse made misleading statements, such as claiming that individuals could be “100% certain” to have all the money they needed to retire in “Just 3-5 Years,” on his website and in a YouTube video created to advertise his retirement planning program. CFP Board further alleged that the YouTube video, which targeted individuals in their fifties and sixties with underfunded retirement savings, was misleading because it appeared to be a news broadcast although it was, in fact, a paid advertisement. Mr. Rouse also failed to provide information requested by CFP Board in connection with its investigation. CFP Board’s Complaint alleged that Mr. Rouse violated: (i) Standard A.2.b.ii. of the Code of Ethics and Standards of Conduct by making misleading statements in the conduct of professional services; and (ii) Standard E.5 of the Code of Ethics and Standards of Conduct by failing to cooperate with CFP Board’s investigation. Mr. Rouse failed to file an Answer to CFP Board’s Complaint within 30 calendar days of the date of service, as required by Article 3.2 of the Procedural Rules. Under Article 4.1.b. of the Procedural Rules, Mr. Rouse has been deemed in default, and CFP Board issued an Administrative Order of Permanent Bar. Mr. Rouse’s administrative permanent bar was effective as of October 20, 2022.

Texas

Ernest Frerking (Austin, Texas): In September 2022, CFP Board issued an administrative order permanently barring Mr. Frerking from applying for or obtaining the CFP® certification marks. This sanction followed Mr. Frerking’s relinquishment of his certification and failure to file an Answer to CFP Board’s Complaint within the required time frame. CFP Board alleged that Mr. Frerking failed to cooperate with CFP Board’s investigation into an alleged misappropriation of funds. During the course of the investigation, Mr. Frerking failed to appear for questions by oral examination. CFP Board’s Complaint alleged that Mr. Frerking’s conduct violated Standard E.5 of the Code of Ethics and Standards of Conduct, which requires a CFP® professional to cooperate fully with CFP Board’s requests, investigations, disciplinary proceedings and disciplinary decisions. Mr. Frerking failed to file an Answer to CFP Board’s Complaint within 30 calendar days of the date of service, as required by Article 3.2 of the Procedural Rules. Under Article 4.1.b. of the Procedural Rules, Mr. Frerking has been deemed in default, and CFP Board issued an Administrative Order of Permanent Bar. Mr. Frerking’s administrative permanent bar was effective as of October 21, 2022.

Washington

Richard H. Ivester (Bothell, Washington): In November 2022, CFP Board issued an administrative order permanently barring Mr. Ivester from applying for or obtaining the CFP® certification marks. This sanction followed Mr. Ivester’s failure to file an Answer to CFP Board’s Complaint within the required time frame. CFP Board alleged that Mr. Ivester violated his firm’s policies when he impersonated a customer and requested a distribution on the customer’s behalf pursuant to an annuity contract. CFP Board’s Complaint alleged that Mr. Ivester violated Standard A.2.b.ii. of the Code of Ethics and Standards of Conduct by making an untrue statement of a material fact in the conduct of Professional Services, and Standard E.3 of the Code of Ethics and Standards of Conduct by failing to provide written notice to CFP Board within 30 calendar days of his termination. Mr. Ivester failed to file an Answer to CFP Board’s Complaint within 30 calendar days of the date of service, as required by Article 3.2 of the Procedural Rules. Under Article 4.1.b. of the Procedural Rules, Mr. Ivester has been deemed in default, and CFP Board issued an Administrative Order of Permanent Bar. Mr. Ivester’s administrative permanent bar was effective as of December 20, 2022.

REVOCATION

CALIFORNIA

Susan Honig (Valley Village, California): In October 2022, CFP Board issued an administrative order permanently revoking Ms. Honig’s right to use the CFP® certification marks. This sanction followed Ms. Honig’s failure to file an Answer to CFP Board’s Complaint within the required time frame. CFP Board alleged that Ms. Honig failed to cooperate with CFP Board’s investigation by not responding to requests for information about her lack of diligence in corresponding with her clients and answering inquiries that came into her office. CFP Board’s Complaint alleged that Ms. Honig’s conduct violated Standard E.5 of the Code of Ethics and Standards of Conduct, which provides that a CFP® professional must cooperate fully with CFP Board’s requests, investigations, disciplinary proceedings and disciplinary decisions. Ms. Honig failed to file an Answer to CFP Board’s Complaint within 30 calendar days of the date of service, as required by Article 3.2 of the Procedural Rules. Under Article 4.1.b. of the Procedural Rules, Ms. Honig has been deemed in default, and CFP Board issued an Administrative Order of Revocation. Ms. Honig’s administrative revocation was effective as of November 23, 2022.

Maryland

Tim Murphy (LaPlata, Maryland): In September 2022, CFP Board issued an administrative order permanently revoking Mr. Murphy’s right to use the CFP® certification marks. This sanction followed Mr. Murphy’s failure to file an Answer to CFP Board’s Complaint within the required time frame. CFP Board alleged that Mr. Murphy violated Standard E.5 of the Code of Ethics and Standards of Conduct when he failed to satisfy his Duty of Cooperation by refusing to respond to CFP Board’s requests for information and a Notice of Failure to Cooperate. CFP Board sought to investigate Mr. Murphy’s Consent Order with the Court of Appeals of Maryland in which he was disbarred from practicing law in the State of Maryland, effective January 1, 2021, for violating Rules 1.1 (competence), 1.3 (diligence), 1.4 (communication), 1.5 (fees), 1.15 (safekeeping property), 1.16 (declining or terminating representation), 8.1 (bar admission and disciplinary matters) and 8.4 (a), (c) and (d) (misconduct) of the Maryland Rules of Professional Conduct. Mr. Murphy failed to file an Answer to CFP Board’s Complaint within 30 calendar days as required by Article 3.2 of the Procedural Rules. Under Article 4.1.b. of the Procedural Rules, Mr. Murphy has been deemed in default, and CFP Board issued an Administrative Order of Revocation. Mr. Murphy’s administrative revocation was effective as of October 16, 2022.

MISSOURI

Joel P. Kichline (Frontenac, Missouri): In September 2022, CFP Board issued an administrative order permanently revoking Mr. Kichline’s right to use the CFP® certification marks. This sanction followed Mr. Kichline’s failure to file an Answer to CFP Board’s Complaint within the required time frame. CFP Board alleged that Mr. Kichline violated Standard E.5 of the Code of Ethics and Standards of Conduct when he failed to satisfy his Duty of Cooperation by refusing to respond to CFP Board’s requests for information and a Notice of Failure to Cooperate. CFP Board sought to investigate Mr. Kichline’s Letter of Acceptance, Waiver and Consent (AWC) with the Financial Industry Regulatory Authority (FINRA) in which he consented to a one-month suspension and a $5,000 fine for violating National Association of Securities Dealers (NASD) Rule 2510(b) and FINRA Rules 3260(b) and 2010 by exercising discretion without permission on 1,519 occasions from January 1, 2019, through July 9, 2020, in five customers’ accounts. Although the customers gave Mr. Kichline oral discretion to purchase or sell securities, none of the customers provided prior written authorization for Mr. Kichline to exercise discretion in their accounts. Additionally, CFP Board sought to investigate Mr. Kichline’s termination for violating firm policy by exercising discretion without authorization from certain clients prior to placing trades in those clients’ non-discretionary accounts and by exceeding time and price discretion authority with regard to other clients. Mr. Kichline failed to file an Answer to CFP Board’s Complaint within 30 calendar days as required by Article 3.2 of the Procedural Rules. Under Article 4.1.b. of the Procedural Rules, Mr. Kichline has been deemed in default, and CFP Board issued an Administrative Order of Revocation. Mr. Kichline’s administrative revocation was effective as of October 15, 2022.