NASD Bars Former AmSouth Broker for Fraud in the Sale of Variable Annuities
Washington, D.C. -- NASD announced today that James B. Moorehead of Starkville, MS, has been barred from the securities industry for engaging in fraud, forgery and falsification of documents in connection with variable annuity sales. The transactions took place between March 2000 and April 2001 while Moorehead was a registered representative of AmSouth Investment Services, Inc.
Moorehead’s sales assistant, Angela C. Wynne, has also been charged in connection with the scheme.
“The conduct of the broker in this case was reprehensible, and clearly merits the harshest penalty NASD can impose,” said NASD Executive Vice President and Head of Enforcement Barry Goldsmith.
NASD found that Moorehead misrepresented the risks associated with investing in variable annuities and purposefully omitted risk disclosure statements from the performance hypotheticals his firm sent to customers. Moorehead also either forged, or caused his assistant to forge, customer signatures on 125 “Purchase Authorization Forms.” These documents were intended to reflect customers’ authorization to Moorehead to purchase variable annuities.
Moorehead also tried to make his variable annuity recommendations appear suitable by falsifying the suitability information on the Purchase Authorization Forms and on “Client Confidential Profiles.” Moorhead directed his assistant to complete the forms with inaccurate information concerning the financial needs and condition of the customers.
In concluding this settlement, Moorehead neither admitted nor denied the charges, but consented to the entry of NASD’s findings.
NASD has also filed a complaint against Moorehead’s assistant, Angela C. Wynne, a general securities representative formerly associated with AmSouth. The complaint charges Wynne with forgery and falsification of documents. NASD is currently investigating the supervision of Moorehead and Wynne by AmSouth Investment Services, Inc.
Under NASD rules, an individual named in a complaint can file a response and request a hearing before an NASD disciplinary panel. Possible sanctions include a fine, order to pay restitution, censure, suspension, or bar from the securities industry.
Investors can obtain more information about, and the disciplinary record of any NASD-registered broker or brokerage firm by contacting NASD's BrokerCheck. NASD makes BrokerCheck available at no charge to the public. In 2003, members of the public used this service to conduct more than 2.9 million searches for existing brokers or firms and requested almost 180,000 reports in cases where disclosable information existed on a broker or firm. Investors can link directly to the program by going online to www.nasdbrokercheck.com. Investors can also access this service by calling 1-800-289-9999.
NASD is the leading private-sector provider of financial regulatory services, dedicated to investor protection and market integrity through effective and efficient regulation and complementary compliance and technology-based services. NASD touches virtually every aspect of the securities business - from registering and educating all industry participants, to examining securities firms, enforcing both NASD rules and the federal securities laws, and administering the largest dispute resolution forum for investors and registered firms. For more information, please visit our Web site at www.nasd.com.
# # #