According to FINRA, Synovus Securities, Inc. was censured and fined $315,000 for failing to establish, maintain, and enforce a reasonably designed supervisory system concerning forgery and falsification of electronic signatures.

The firm's compliance failures were extensive. Synovus permitted personnel to electronically sign documents on behalf of registered representatives in certain limited circumstances without requiring any indication that someone else had signed on their behalf. This practice resulted in at least 500 documents being signed in this manner.

More critically, the firm had no system for reviewing certificates of completion for electronic signatures and maintained no other controls concerning non-genuine electronic signatures. The firm's written supervisory procedures were completely silent on the topic of electronic signatures, creating a regulatory blind spot.

This lack of oversight allowed associated persons at one branch to collectively forge or falsify more than 100 customers' signatures on more than 150 documents. These forgeries resulted in the firm maintaining hundreds of inaccurate books and records, a serious violation of securities regulations.

The misconduct was eventually discovered by firm operations personnel while processing paperwork from the branch. Once discovered, Synovus attempted to contact all affected customers, verified that the underlying transactions were authorized, and in many instances obtained properly re-executed documents. No customers filed complaints.

Following this incident, the firm implemented a weekly review of certificates of completion for red flags indicating potential forgery or falsification and memorialized these procedures in its written supervisory procedures.

This case highlights the growing importance of electronic signature controls in modern brokerage operations. While electronic signatures provide convenience, they also create new opportunities for misconduct if not properly supervised.

For investors, this case reinforces the importance of carefully reviewing all documents before signing and maintaining personal records of authorized transactions. If you ever receive confirmation of a transaction you did not authorize, contact your firm and FINRA immediately.