← Broker database 2023-11-27
Jacob Pae Suspended for Forging Customer Signatures on Authorization Forms
According to FINRA, Jacob Pae was fined $5,000 and suspended for 45 days for forging the electronic signatures of customers on documents.
Pae received Automated Clearing House (ACH) Authorization Agreements concerning brokerage accounts executed by customers that contained clerical errors and required re-execution. Rather than sending the customers corrected agreements to re-execute, Pae copied the electronic signatures from the original agreements and pasted them to the corrected agreements without the customers' consent. Subsequently, Pae submitted the documents containing the forged customer signatures to his firm for review and approval.
By forging customer signatures, Pae caused his firm to preserve inaccurate records. The documents falsely indicated that customers had reviewed and signed the corrected agreements when in fact they had not.
While Pae's intent may have been to save time and avoid bothering customers to re-sign forms that only had clerical errors, the practice of copying and pasting signatures is forgery and creates serious risks. Customers are entitled to review documents before signing them, even corrected versions of previously signed documents. The corrections, even if only clerical, might be important or might inadvertently change the meaning of the agreement.
ACH Authorization Agreements govern how funds can be moved in and out of customer accounts through the automated clearing house system. These are important documents that authorize electronic transfers of customer funds, making it particularly problematic to forge signatures on them.
Investors should understand that their signatures on financial documents are not just a formality - they represent acknowledgment and agreement with the terms. Any broker who copies, pastes, or otherwise forges customer signatures is engaging in misconduct, even if the intent seems benign. Always insist on reviewing and personally signing all account documents.