CFP® Certificants in the News
This blog’s title confirms that it’s not always good to have one’s name in the news.
According to CFP Board’s November 22, 2021 release, “Certified Financial Board of Standards, Inc. (CFP Board) announced today public sanctions against 22 current or former CFP® professionals or candidates for CFP® certification, effective immediately or on the date noted in each case. Public sanctions taken by CFP Board, in order of increasing severity, include Public Censures, Suspensions, Temporary Bars, Permanent Bars, and Revocations of the right to use the CFP® marks.
Eighteen of the public sanctions announced in this news release are the result of ‘Historical Investigations’ opened by CFP Board following background checks conducted on all CFP® professionals to detect potential misconduct that previously had not been reported to CFP Board. This misconduct can include regulatory actions, firm terminations, customer complaints, arbitrations, and civil court litigation that involve professional conduct, criminal matters, bankruptcies, civil judgments, and tax liens.”
We will view these sanctions through the lens of three all-to-common themes.
- Tax-related sanctions
- Bankruptcy and DUI sanctions
- Failure to respond to CFP Board and other serious infractions
A surprising number of the sanctions involved the failure of the certificant or candidate to file or pay federal income taxes. For example, sanctions included the following:
- A public censure for failing to file income tax returns for five years, resulting in IRS assessments totaling $130,000 and six federal tax liens,
- A one-year suspension for failing to pay $436,000 in IRS tax liens, and
- A one-year suspension for failing to pay income taxes for nine consecutive years.
Bankruptcy and DUI Sanctions
As expected, CFP Board continues to focus upon bankruptcy and DUI violations. Sanctions included the following:
- A public censure for pleading guilty to a DUI (driving while intoxicated) charge, and
- A public censure for filing for a Chapter 7 liquidation in bankruptcy.
Failing to Respond to CFP Board and Other Serious Infractions
These infractions appear to be a sure-fire way to earn a career-ending sanction. Examples follow:
- A permanent bar was assessed against one certificant who failed to respond to CFP Board requests for information regarding an SEC regulatory action,
- A permanent bar was imposed upon a certificant who allowed a FINRA-disbarred individual to “conduct a securities business through a member firm,” and
- A permanent bar was meted out against a certificant for a FINRA suspension in which FINRA alleged the individual falsified a number of customer trades.
CFP Board telegraphs its enforcement focus for existing certificants and candidates in these periodic releases. Take a moment and read through each case history. Pay particular attention to those cases in which the sanction was assessed or increased in severity for failing to respond to CFP Board inquires or, even worse, lying to CFP Board.