According to FINRA, Zachary Benjamin Simpson was assessed a deferred fine of $5,000 and suspended from association with any FINRA member in all capacities for three months for forging the signatures of customers and a colleague.
Simpson forged the signatures of customers of his member firm and a colleague on Transfer Report Service Responsibility Forms that established him as the assigned financial professional on their existing accounts, without receiving their prior permission or authority to sign their names on those forms.
The suspension is in effect from December 19, 2022, through March 18, 2023.
Forgery of customer signatures is one of the most serious violations in the securities industry because it involves creating false documentation that purports to reflect the customer's authorization or instructions. In this case, Simpson forged signatures on forms that transferred service responsibility for accounts to him, essentially assigning him as the financial professional for those accounts.
Transfer Report Service Responsibility Forms are used to document the transfer of account servicing from one representative to another. When customers sign such forms, they are authorizing the change in who will service their accounts. By forging these signatures, Simpson falsely created the appearance that customers had consented to having him service their accounts when they had not.
The motivations for such conduct can vary. Representatives may forge signatures on transfer forms to take credit for accounts and the associated revenue without actually having the customer's permission. This can occur when representatives are competing for accounts, when accounts are being reassigned due to a representative's departure, or when representatives are seeking to inflate their book of business.
Regardless of the motivation, forgery is always unacceptable. It creates false records, violates customer autonomy, and demonstrates a willingness to engage in dishonest conduct. The fact that Simpson also forged a colleague's signature suggests he was willing to engage in forgery not just of customer documents but also of internal firm documents.
The three-month suspension and $5,000 fine reflect the seriousness of forgery. While some might argue that signing a service transfer form is less serious than forging a signature on a trade authorization or withdrawal request, any forgery of customer signatures represents a fundamental breach of trust and violates the integrity of the documentation upon which the securities industry relies.
For investors, this case highlights the importance of carefully reviewing any documents you are asked to sign and ensuring that you have actually signed any documents that bear your signature. If you receive account statements or other communications indicating that a new representative is servicing your account and you did not authorize such a change, contact the firm immediately to investigate. Review account documents periodically to ensure all signatures are your own and that no transactions or changes have been made without your authorization.
The securities industry operates on documentation. When representatives forge signatures, they undermine the entire system of documented customer authorization and create the potential for unauthorized transactions and account changes. While Simpson's forgeries involved service transfer forms rather than trading authorizations, forgery of any customer signature demonstrates a character deficiency that should disqualify someone from working with customer accounts.
