According to FINRA, Kale KH Young was fined $5,000 and suspended from association with any FINRA member in all capacities for 20 business days for falsifying customer signatures on firm documents.

Young falsified the signatures of three customers of his member firm on various forms, though he had the customers' permission to do so. The falsifications took different forms: Young re-used one customer's previously obtained genuine signature on account transfer forms and mutual fund replacement forms; he re-used another customer's previously obtained genuine signature on mutual fund replacement forms; and he affixed a copy of a third customer's signature to a life insurance product acknowledgement form. In each instance, the customers did not actually sign the documents but authorized Young to affix or re-use their signatures.

Young also falsely stated on an annual compliance questionnaire that he had not signed or affixed any other person's signature on a document, compounding the problem with false attestation. The firm used all but one of the falsified documents to authorize and record the sale, transfer, or disbursement of cash or securities from customers' accounts. As a result, Young caused his firm to maintain inaccurate books and records.

While Young had customer permission to affix signatures, this does not excuse the conduct. Securities regulations require actual signatures on documents for important reasons: signatures evidence informed consent at the time of transaction, create accountability, and prevent disputes about whether customers actually authorized transactions. Even with customer permission, using copied or re-used signatures on documents authorizing the movement of money or securities creates serious risks and undermines the integrity of firm records.

The 20-business-day suspension reflects that Young had customer permission, but nevertheless engaged in improper conduct that violated recordkeeping requirements. For investors, this case illustrates that proper documentation matters even when customers trust their representatives. Investors should be wary of any representative who suggests shortcuts to signature requirements, as these shortcuts may violate regulations and create future disputes. The suspension was in effect from July 3, 2023, through July 31, 2023.