CFP Board Sanctions 2023  

CFP Board Announces Imposed Sanctions on 22 Certified Financial Planners

The CFP Board refers to the Certified Financial Planner Board of Standards, Inc. It’s a nonprofit organization that serves as the professional body for financial planning in the US. The CFP Board’s mission is to promote and uphold the highest standards of competence, ethics, and professionalism for financial planners.

On May 15, 2023, the CFP Board announced it has imposed sanctions against 22 current or former certified financial planners for various violations. The sanctions include censures, suspensions, bars and revocations of the right to use the CFP marks. According to the board’s disciplinary code, permanent bars apply to planners who do not currently hold the CFP mark, while revocations apply to CFP holders.

Three planners were censured, one was temporarily barred, four were suspended, six received a permanent bar, and eight had their rights to use the CFP marks revoked, according to the announcement.

Paul E. Ferraresi, Bellaire, Texas: In December 2023, CFP Board reportedly permanently revoked Ferraresi’s right to use the CFP® certification marks. The CFP Board’s Complaint alleged that Ferraresi: (1) lacked a reasonable basis to make multiple unsuitable recommendations that customers invest in risky alternative investments; (2) failed to exercise his fiduciary duties to his customers by recommending investing in an illiquid alternative investment without conducting adequate due diligence into the product; and (3) filed bankruptcy to avoid actual and potential obligations to customers.

CFP Board’s Complaint further alleged that Ferraresi’s conduct violated CFP Board Rules of Conduct, including always placing the interest of the client ahead of his or her own, making and implementing only recommendations that are suitable for the client and not engaging in conduct which reflects adversely on his or her integrity or fitness as a CFP® professional. Ferraresi’s administrative revocation was reportedly effective as of January 11, 2023. 

Michael Giannetti, Grapevine, Texas: In September 2022, CFP Board reportedly issued an order permanently revoking Giannetti’s right to use the CFP® certification marks. This sanction allegedly followed Giannetti’s failure to provide evidence to CFP Board that he had complied with an Interim Suspension Order. CFP Board had reportedly suspended Gianetti after realizing that Financial Industry Regulatory Authority barred him for refusing to participate in its investigation into his potential participation in undisclosed outside business activities. Giannetti’s administrative revocation was effective as of October 7, 2022. Giannetti was reportedly registered with MML Investors Services in McKinney Texas from 03/17/2016 – 12/01/2021. 

Douglas McKelvey, South Lake, Texas: In January 2023, CFP Board reportedly issued an order permanently revoking McKelvey’s right to use the CFP® certification marks. On September 21, 2022, CFP Board issued McKelvey an Interim Suspension Order after learning that the Financial Industry Regulatory Authority permanently barred him from associating with a member firm in any capacity. CFP Board was allegedly investigating McKelvey’s termination from his firm after allegations of unauthorized activity and misappropriation of client funds from client accounts. McKelvey’s administrative revocation was effective as of February 20, 2023. McKelvey was reportedly affiliated with Morgan Stanley in Southlake, Texas from 06/01/2009 – 05/05/2022. 

Shawn E. Parker, St. Charles, Illinois: In December 2022, the CFP Board reportedly permanently revoked Parker’s right to use the CFP® certification marks after she failed to file an Answer to CFP Board’s Complaint within the required time frame. CFP Board alleged that Parker submitted inaccurate reimbursement requests to her firm in connection with annual client events and, thus, received reimbursements for expenses not eligible for reimbursement through the firm’s program. The Complaint further alleged that Parker purportedly violated her firm’s compliance policies by failing to disclose gifts to clients as well as charitable contributions that she made. Parker was permitted to resign from her firm and consented to a permanent bar from the Financial Industry Regulatory Authority (FINRA). Parker’s administrative revocation was effective as of January 1, 2023.  

David R. Geake, Northbrook, Illinois: In March 2023, CFP Board reportedly permanently revoked David Geake’s right to use the CFP® certification marks after he reportedly failed to file an Answer to CFP Board’s Complaint within the required time frame. The CFP Board was investigating Geake’s alleged resignation from a FINRA-registered firm for purportedly engaging in an unreported private securities transaction and several customer arbitrations. The arbitrations reportedly included allegations of unsuitable alternative investments, failure to conduct due diligence on the alternative investments and breach of fiduciary duty. Geake’s administrative revocation was effective as of May 1, 2023.

Richard M. Sanders, North Tustin, California: In March 2023, CFP Board reportedly permanently barred Sanders after relinquishment of his certification and failure to file an Answer to CFP Board’s Complaint within the required time frame. According to the complaint, CFP Board was reportedly investigating a client complaint alleging unauthorized trading and dishonesty, and a second client complaint alleging unauthorized trading.  Sanders’ permanent bar was effective as of April 24, 2023.

Mark J. Jensen of Santa Fe, N. M., reportedly had his rights to use the CFP marks revoked, effective April 3, after failing to respond to a complaint by the board alleging that he did not act in the best interests of 12 financial planning clients. Jensen purportedly recommended an options-based investment fund that he did not adequately understand, thus “overconcentrating clients in this unsuitable options-based investment fund with some concentration levels reaching 41%; and recommending that at least two of these clients leverage their accounts to purchase the unsuitable options-based investment fund.”

While the fund’s (LJM Preservation and Growth Fund) prospectus indicated significant risks, Jensen allegedly believed it to be conservative and safe, according to the board. The board said that Jensen “failed to obtain basic client information, such as the clients’ investment objective and risk tolerance, necessary to fulfill his obligations to his clients. Jensen’s clients reportedly consequently “lost multiple millions of dollars.”

According to Jensen’s Investment Adviser profile, he has nine customer disputes filed against him for breach of fiduciary duty and misconduct related to the LJM fund. Seven of the complaints received settlements ranging from $45,000 to $427,329. One client was awarded a judgement in the amount of $272,029.53, and one was denied.  Jensen was reportedly affiliated with Tembion Capital Management in Santa Fe, New Mexico from 2012 until 2022.  

Kathryn Jane Meredith, Webster, New York: In December 2022, the CFP Board reportedly permanently barred Meredith after failure to respond to the board’s investigation. The board was reportedly investigating an SEC order from June 6, 2022. The U.S. Securities and Exchange Commission Cease and Desist Order charged Meredith’s firm in which she was an owner until February 28, 2020, when she retired.

Meredith’s firm, KM Advisory Services, allegedly breached its fiduciary duty in connection with its receipt of mutual fund fees and commissions in the form of sales “loads” from advisory client investments without fully and fairly disclosing the conflicts of interest arising from its receipt of that compensation. The Order further stated that, since at least January 2016, the firm invested most of its clients’ assets in certain mutual funds that paid 12b-1 fees and charged sales load commissions exclusively through an introducing broker-dealer, with whom Meredith was a registered representative. As a result, the firm’s clients paid 12b-1 fees and commissions to the Introducing Broker-Dealer, a portion of which was shared with the firm, according to the order.  Meredith’s bar was effective as of January 4, 2023.  Meredith was reportedly affiliated with Cadaret, Grant and Co. A FINRA-registered broker-dealer from 1994 until 2021.

Failure to Supervise
All broker-dealers have a responsibility to adequately supervise its employees. They must ensure the necessary procedures and systems to detect misconduct.  Brokerage firms that fail to monitor the business activities of their employees may be liable for investment losses due to negligent supervision for the misconduct of their employees.  When brokers violate securities laws, such as making unsuitable investments, the brokerage firm they are working with may be liable for investment losses through FINRA Arbitration.  

If your broker has defrauded you, you may be able to file a FINRA claim against your brokerage firm. FINRA arbitration can be a complex and technical process, and having an experienced attorney who is knowledgeable about securities law can greatly increase your chances of success.

If you have concerns regarding investments you purchased through a financial advisor and would like to speak with a securities attorney, please call The White Law Group at 888-637-5510.
The White Law Group is a national securities arbitration, securities fraud, and investor protection law firm with offices in Chicago, Illinois. For more information on The White Law Group, visit www.whitesecuritieslaw.com.