According to FINRA, Shawn Paris Patrick was fined $5,000 and suspended for 10 business days on January 4, 2022, for impersonating customers during telephone calls to a third-party firm that administered a 401(k) plan.

Four customers requested Patrick's assistance with making changes to their 401(k) accounts, including reallocating account holdings. Rather than having the customers make the calls themselves or facilitating proper authorization, Patrick made four separate calls to the plan administrator and posed as the customers. While impersonating them, Patrick made the requested changes to their account allocations.

Although the customers had requested these changes and Patrick was trying to help them, his conduct violated fundamental principles of proper customer authorization and account handling. Financial professionals must ensure that account changes are properly authorized by the actual account holders, not by impersonating them.

Impersonation creates serious risks even when the representative believes they are acting in the customer's best interests. It bypasses important safeguards designed to ensure that account changes are actually authorized by customers. It also creates opportunities for unauthorized trades or changes that customers did not request.

FINRA considered that Patrick's member firm had already suspended him for 14 days and fined him $7,500 when determining the appropriate regulatory sanctions. The firm's internal discipline demonstrates that it took this misconduct seriously and acted to address it.

For investors, this case illustrates the importance of directly authorizing any changes to your accounts. While it may seem convenient to have your advisor handle administrative tasks, proper procedures require your direct involvement to protect your interests. Be cautious if an advisor suggests taking shortcuts with authorization procedures, as this can expose you to risk of unauthorized account activity.

Investors should review their account statements regularly to ensure all activity was properly authorized and report any discrepancies immediately.