According to FINRA, Wayne von Borstel was assessed a deferred fine of $5,000 and suspended from association with any FINRA member in all capacities for 15 business days for causing his member firm's books and records to be inaccurate by failing to identify the intended beneficiaries on new account forms for 529 plan accounts.

The violations occurred after von Borstel's firm implemented a new policy prohibiting the purchase of Class C shares in 529 plan accounts for young beneficiaries unless the firm granted an exception. This policy was designed to protect young beneficiaries from inappropriate share class selections. Class C shares typically have higher ongoing fees than other share classes and may be unsuitable for long-term investments like education savings for young children, where lower-cost share classes would accumulate greater value over time.

After the policy became effective, some of von Borstel's customers decided to close existing 529 plan Class C share accounts for young beneficiaries and open new 529 plan Class C share accounts. Rather than seeking firm approval under the new policy, von Borstel deliberately circumvented it. When completing the required forms to establish new 529 plan Class C share accounts, he identified adults related to the young beneficiaries, typically a parent, as each account's beneficiary instead of identifying the actual young beneficiaries.

By falsifying the beneficiary information, von Borstel enabled these accounts to bypass the firm's review under its new 529 plan policy and caused the firm's books and records to be inaccurate. This manipulation undermined the firm's supervision and potentially exposed young beneficiaries to unsuitable investments with higher costs than necessary.

Accurate books and records are fundamental to securities regulation. Firms and regulators rely on accurate records to supervise activities, detect violations, and protect investors. When representatives deliberately falsify records to circumvent firm policies, they undermine these protections and may expose customers to harm.

The 15-business-day suspension reflects that von Borstel deliberately circumvented a firm policy designed to protect young investors. This case reminds investors, particularly parents saving for children's education, to verify that 529 plan account documentation accurately reflects the intended beneficiaries and that share class selections are appropriate for long-term education savings goals.