An ex-Royal Alliance Associates broker allegedly impersonated one of his clients during not one, but two telephone calls with the customer services hotline of an annuity company, and things went badly from there for him, according to a Financial Industry Regulatory Authority letter of acceptance, waiver and consent he signed Nov. 5.
Harold A. Schwartz wound up being “permitted to resign” from Advisor Group’s Royal Alliance wealth management firm, according to a Uniform Termination Notice for Securities Industry Registration (Form U5) filed Feb. 22.
FINRA has now suspended him for 15 days and slapped him with a $5,000 fine. In his AWC letter, Schwartz agreed to accept those sanctions without admitting or denying the findings. FINRA accepted the letter Nov. 21.
In July 2018, Schwartz received permission from a client of his to lower the periodic withdrawals from an annuity the customer had bought previously, according to the AWC letter. “Thereafter, Schwartz impersonated the customer during two telephone calls with the customer service hotline of the annuity company and was successful in obtaining a reduction of the periodic withdrawals from the customer’s annuity,” the letter said. It added: “Although the customer gave Schwartz permission to effect the reduction of withdrawals, he did not give Schwartz permission to impersonate him with the annuity company.”
In the process, Schwartz violated FINRA Rule 2010, which calls for a member, in the conduct of his or her business, to “observe high standards of commercial honor and just and equitable principles of trade.”
Royal Alliance/Alliance Group, Schwartz and his current firm — Stephen A. Kohn & Associates in Lakewood, Colorado — didn’t immediately respond to requests for comment.