The Financial Industry Regulatory Authority has fined and suspended a former NYLife Securities broker for allegedly forging client signatures on a life insurance policy application.
According to a letter of acceptance waiver and consent issued by FINRA, in 2017, Thomas Barone allegedly forged the signatures of an insurance customer and his wife on an application for a whole life insurance policy.
Once the policy went into effect, Barone purportedly signed the customer’s signature to a policy illustration document and receipt form, which included disclosures of the policy terms, rider details, coverage amount, and premiums owed. He also signed the policy receipt form as agent, falsely certifying that he had delivered the signed application and policy illustration to the customer.
FINRA noted that Barone signed the forms with the mistaken understanding from another registered representative in his office that he had permission from the customer to sign on their behalf. He received approximately $3,200 in upfront and trailing commissions as a result of the sale.
In September 2018, the customer complained that the policy had not been authorized and wanted to be repaid for the premium payments, which had been automatically debited from his account. To settle the complaint, Barone paid $10,000 without the firm’s knowledge or approval.
NYLife’s policies prohibited the signing of a customer’s name to any document related to the sale of a securities or insurance product, regardless of whether the customer authorized it. The firm also required Barone to forward all complaints to the firm’s compliance department, which he failed to do.
In November 2018, the NYLife commenced an investigation, and Barone denied forging any of the documents. The firm later settled fully with the customer.
Without admitting or denying the allegations, Shah agreed to a four-month suspension and $5,000 fine. The Louisiana Department of Insurance revoked Barone’s insurance license in August 2019 and fined him $1,000 for the alleged misconduct.