Morgan Stanley Smith Barney Employee Fined and Suspended by FINRA Over Unauthorized Signatures

The Financial Industry Regulatory Authority has imposed a 60-day suspension on Carmela L. Knieriem, a former Morgan Stanley Smith Barney female employee over allegations that while employed by the financial firm, she signed other employees’ signatures without obtaining the required approvals and authorizations. FINRA is also fining Knierem $5,000. While she has submitted a Letter of Acceptance, Waiver and Consent to settle the charges, Knierem is not denying or admitting to the findings.

According to Forbes.com, Between November 2009 and October 14, 2010, Knieriem was associated with the financial firm’s Rancho Bernardo Branch, where she was tasked with providing branch managers, financial advisers, and other employees with administrative support. Part of her job was to prepare specific internal administrative forms related to the processing and documenting of verbal requests, known as “Verbal Forms,” that were made by customers.

FINRA says that when Knieriem made the unauthorized signatures when preparing these Verbal Forms she violated FINRA Rule 2010 10 times. The SRO contends that in six instances, at the request of the financial advisor EP, she prepared an instruction form documenting a client’s verbal request for journal funds between the client’s accounts, the transfer of money from a client’s account, the release of account statements to a third party, and the issuance of a $75,397.22 check from the customer’s account. Knieriem also is said to have followed a financial advisor GT’s request to prepare an instruction form for a client’s verbal request that a stop payment be placed on one of his checks. She also followed the request of a financial adviser CL, who asked her to prepare an instruction form to issue a $95.62 for a client. Also, FINRA says that branch manager RL asked her to prepare an instruction form to journal funds between accounts.

Morgan Stanley also conducted its own investigation into the matter. Knieriem has since voluntarily left the financial firm.

Shepherd Smith Edwards & Kantas LTD LLP founder and stockbroker fraud lawyer Bill Shepherd said: “The only surprise here would be if she kept her job or if any other firm would hire her. Every licensed securities person knows this is a very serious violation. Brokers at large firms manage tens of millions, and often hundreds of millions, of dollars. Those who violate the rules in this manner do not belong in that position. Moreover “uttering a forgery” is not just a rule violation, it is a crime even if there was no financial harm. The only legal defense would be if the person whose name was signed specifically gave her permission and was authorized to do so.”

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Morgan Stanley Smith Barney Female Employee Suspended and Fined for Unauthorized Signatures, Forbes, September 23, 2011
FINRA

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