FINRA fined Cetera Financial Specialists $200,000 for supervisory deficiencies concerning its broker Alex P Anderson, whom FINRA previously barred for purportedly abusing his Power of Attorney privileges over a 94-year-old client to allegedly steal $75,500. In its investigation, FINRA found that while Anderson properly disclosed his fiduciary relationship with the elderly customer, Cetera failed to adequately respond to the disclosures.
AWC #2015045233601 (Cetera) / AWC #2014043846601 (Anderson)
According to the findings, Cetera failed to appropriately respond to no less than three disclosures from Anderson (CRD #4243107) that he held a power-of-attorney over an elderly customer as well as her 75-year-old son-in-law, which enabled him to make withdrawals from the client's bank and investment accounts.
Anderson purportedly submitted these disclosures well before he misappropriated at least $75,500 from his elderly client.
The findings state that Anderson submitted several outside business activity disclosures to Cetera Financial about his work for his two senior citizen customers, and that despite Cetera's written supervisory procedures that prohibited representatives from acting in a fiduciary capacity for a non-family member customer's account without firm approval, the firm failed to timely review, evaluate, or respond to Anderson's disclosures.
Once Anderson began effecting the violative transfers or withdrawals, Cetera purportedly failed to review Anderson's transactions until an outside mutual fund issuer picked up on some red flags and alerted the firm, by which time Anderson had already withdrawn and misused at least $75,500 of his since-deceased client's funds.
Although FINRA cited Cetera for failing to respond to Anderson's disclosures, and barred Anderson for misappropriating funds from his clients, investigators found that Cetera's problems concerned at least 200 disclosures in addition to Anderson's, concluding that Cetera unreasonably failed to review all of these disclosures for over a year after they were received, specifically relating to disclosures concerning brokers' requests to act in a fiduciary capacity for non-family members.
If you have invested with Alex P Anderson or with Cetera Financial Specialists, which failed to adequately supervise Anderson, a broker who acted as a fiduciary for non-family members in contravention of firm policy, and such a violation has proven harmful to your investments or interests when the representative abused power-of-attorney or other privileges that granted the rep access to your account, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.