Broker Settles FINRA Charges for Accepting Unauthorized Bequest

A broker settled FINRA charges for agreeing to be named a beneficiary to a customer's life insurance policy without notifying or receiving written approval from his firm.

According to the AWC, the broker "attempted to remove himself as beneficiary but, due to miscommunication with the insurer, the change never took effect." Following the customer's death, the broker received over $50,000 from the policy, which he held until his firm discovered the bequest years later and directed him to return the funds to the estate.

FINRA concluded that the broker violated FINRA Rules 3241 ("Registered Person Being Named a Customer’s Beneficiary or Holding a Position of Trust for a Customer") and 2010 ("Standards of Commercial Honor and Principles of Trade").

To settle the matter, the broker agreed to a seven-month suspension from associating with any FINRA member in all capacities and a $10,000 fine.