According to FINRA, Cody Robert Roos was fined $5,000 and suspended from association with any FINRA member in all capacities for four months for forging or falsifying customer signatures on account documents and providing false compliance attestations.
Roos forged or falsified customer signatures on account documents, causing his member firm to maintain inaccurate books and records. While none of the customers complained, some of the names were signed on documents without the customers' permission. In addition, Roos falsely attested in annual compliance questionnaires that he had not signed or affixed another person's signature on a document.
Forging customer signatures on account documents is a serious violation that undermines the integrity of a firm's records and creates the potential for fraud. Even when done for what the broker believes are legitimate reasons (such as administrative convenience), forging signatures makes it impossible to verify that customers actually authorized the documents.
The practice of signing documents on behalf of customers, even with their permission in some cases, creates significant risks. It makes it difficult to distinguish between documents the customer actually authorized and those they did not. It also creates opportunities for abuse, as a broker who has been signing some documents with permission might later sign other documents without permission.
The fact that Roos falsely attested in compliance questionnaires that he had not signed another person's signature demonstrates an attempt to conceal the misconduct from the firm's compliance department. This false attestation is a separate violation that shows consciousness of wrongdoing.
While the finding notes that none of the customers complained and that Roos did not have permission for some of the signatures, the violation remains serious because of the potential for fraud and the actual falsification of firm records.
The four-month suspension and $5,000 fine reflect the seriousness of forging customer signatures and making false compliance attestations. This case demonstrates that brokers must never sign documents on behalf of customers, even when customers might not object. Investors should always sign their own account documents and should be suspicious if their broker offers to sign documents on their behalf.