FINRA suspended former Western International Securities (Pasadena, California) broker Murray Gerard Monroe and fined him $15,000 for failing to disclose that he had been named executor of a firm customer's estate, and that he had also been granted general power of attorney to act on the customer's behalf.
The findings state that Monroe (CRD #2337934) received both fiduciary appointments in August and September 2015, subsequently failing to timely inform Western International Securities of the appointments, and of Monroe's reasonable expectation of compensation for serving in those fiduciary roles, pursuant to the California Probate Code.
According to the investigation, Western International Securities only became aware of Monroe's executor status on October 21, 2015, as a result of processing the closing of the client's account after she died.
In California, a broker owes his/her client a fiduciary duty, or standard of care which generally means placing the client's best interests ahead of his/her own. By failing to disclose appointments such as that of executor and assumption of general power of attorney, a broker may breach this standard by failing to disclose the new financial relationship (e.g., receiving compensation for serving in the new role of executor). Because the CA Probate Code, for instance, operates on a percentage-based fee for executors, a broker who fails to disclose such an appointment has also failed to disclose a financial arrangement that could pose a conflict of interest or financial incentive to conduct transactions that may not be in the best interests of the client.
In 2014, the SEC upheld a $75,000 fine and three-year suspension levied against First Wall Street Corp's Kent Michael Houston for concealing compensated trustee activity in a client's account. The firm reportedly only first became aware of Houston's role during an investigation into possible fraudulent activity in the account, whereupon the firm became aware that Houston possessed check writing authority in the account, for which he maintained a trustee relationship and received compensation in excess of $400,000, including a series of checks Houston wrote to himself and drafted out of the account. Houston had previously denied the existence of such a relationship on annual compliance questionnaires.
A 2002 disclosure in Monroe's BrokerCheck report indicates a $30,000 settlement based on the allegations, "Failed to Follow Instructions."
If you have invested with Murray Gerard Monroe or with any broker or financial adviser who has failed to disclose an appointment to a new fiduciary role such as executor or trustee, and such a disclosure failure or breach of fiduciary duty has proven harmful to your investments or interests before or after the settlor's death (e.g., in a trust) due to unsuitable transactions or excessive fees (in Houston's case, FINRA described them as "large and peculiar withdrawals"), please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.