According to FINRA, Andrew Timothy Durham was assessed a deferred fine of $5,000 and suspended from association with any FINRA member in all capacities for four months for forging a customer's signature on a life insurance application.
Durham completed and submitted an application for a life insurance policy issued by his firm's insurance affiliate with a face value of $50,000 for a customer. However, rather than having the customer sign the application, Durham created multiple fraudulent elements to make it appear as though the customer had applied for and authorized the policy.
First, Durham input his own personal bank account information for the premium payments but falsely indicated the bank account belonged to the customer. This meant premium payments would be withdrawn from Durham's account, not the customer's, which should have been an immediate red flag that something was wrong with the application.
Second, Durham created a fake email address for the customer. This allowed him to receive communications about the policy application and approval without the actual customer ever being aware the application had been submitted.
Third, Durham forged the customer's electronic signature on the policy application. The insurance affiliate approved the application based on this forged signature, not knowing that the customer had never authorized it.
Throughout this process, Durham never possessed the customer's permission or authority to sign the policy application on the customer's behalf. This was not a case of a representative helping a customer fill out forms with permission—this was outright forgery of the customer's signature without any authorization.
Forgery is one of the most serious violations a registered person can commit because it represents a fundamental breach of trust and violation of a customer's autonomy. Every customer has the right to decide what products they wish to purchase and to review and sign applications for those products. By forging the signature, Durham deprived the customer of these rights.
The fact that Durham used his own bank account for premiums suggests he may have intended to pay the premiums himself, perhaps hoping to eventually transfer the policy to himself or someone else, or to keep the policy active for some other improper purpose. Regardless of his ultimate intent, the forgery of the customer's signature was fraud.
The four-month suspension reflects the serious nature of forgery. Investors should verify that all applications for insurance and securities products contain their genuine signatures and that all account information is accurate before submitting applications. Any representative who forges signatures or falsifies application information should be permanently barred from the industry.
