According to FINRA, Brenton Charles Schmidt was fined $5,000 and suspended from association with any FINRA member firm for two months for permitting his business partner to falsify customer signatures on account documents.

Schmidt's business partner falsified the signatures of 9 customers on 53 account documents. In each instance, Schmidt signed his own name on the documents after his partner signed for the customer. The documents, which included new account applications and money transfer forms, were required books and records of his member firm.

While none of the customers complained and the underlying transactions were authorized, Schmidt caused the firm to maintain inaccurate books and records by participating in this signature falsification process.

This case is notable because Schmidt was sanctioned not for falsifying signatures himself, but for knowingly participating in a process where his partner did so. By signing his own name on documents that he knew contained falsified customer signatures, Schmidt facilitated and ratified the misconduct.

Representatives have an obligation to ensure that documents they process contain genuine customer signatures. Knowing participation in signature falsification, even when done by a partner or colleague, violates FINRA rules and causes the firm to maintain false records.

The two-month suspension underscores that representatives cannot avoid responsibility by having someone else perform the actual falsification. Investors should expect that all signatures on their account documents are genuine.