FINRA

FINRA RULES 2010, 8210, NASD RULES 2110, 2330(A) - DOUGLAS EUGENE VANNOY SERVED AS THE REGISTERED REPRESENTATIVE FOR THE ACCOUNTS OF A CUSTOMER OF HIS MEMBER FIRM WHO DIED; AN ESTATE ACCOUNT WAS THEN OPENED FOR THE CUSTOMER. VANNOY OPENED A SOLE PROPRIETORSHIP ACCOUNT IN THE DECEASED CUSTOMER'S NAME FOR VANNOY'S COMPANY; THE ACCOUNT APPLICATION AND A NOTARIZED SOLE PROPRIETOR AFFIDAVIT WERE PURPORTEDLY SIGNED BY THE CUSTOMER. VANNOY CAUSED APPROXIMATELY $20,750 TO BE DEPOSITED INTO THE ACCOUNT FROM THE CUSTOMER'S OTHER FIRM ACCOUNTS OR PERSONAL FUNDS. VANNOY CAUSED THE FUNDS TO BE PAID TO HIS COMPANY FROM THE ACCOUNT THROUGH A LETTER OF AUTHORIZATION TO THE FIRM AND CHECKS WRITTEN FROM THE ACCOUNT CHECKBOOK, ALL PURPORTEDLY SIGNED BY THE CUSTOMER. VANNOY DEPOSITED THE FUNDS INTO HIS PERSONAL CHECKING ACCOUNT, WITHOUT THE AUTHORIZATION OF THE CUSTOMER OR THE EXECUTRIX OF THE CUSTOMER'S ESTATE. VANNOY SUBMITTED INACCURATE DEATH CLAIM DOCUMENTATION FOR THE DECEASED CUSTOMER, INCLUDING AN ALTERED VERSION OF THE DEATH CERTIFICATE, TO HIS FIRM'S IRA PROCESSING DEPARTMENT TO LIQUIDATE AN ANNUITY. VANNOY FAILED TO RESPOND TO FINRA REQUESTS TO APPEAR AND PROVIDE TESTIMONY.

Decision

Bar (Permanent)

All Capacities

2/10/2012

DEFAULT DECISION RENDERED JANUARY 13, 2012, WHEREIN VANNOY IS BARRED FOR: (I) MISAPPROPRIATING FUNDS FROM THE ACCOUNT OF A DECEASED CUSTOMER, IN VIOLATION OF NASD RULES 2110 AND 2330(A), AND FINRA RULE 2010; (II) SUBMITTING AN ALTERED DEATH CERTIFICATE TO HIS EMPLOYER FIRM, IN VIOLATION OF NASD RULE 2110; AND (III) FAILING TO COMPLY WITH REQUESTS TO APPEAR AND PROVIDE TESTIMONY, IN VIOLATION OF FINRA RULES 2010 AND 8210. VANNOY WAS THE REGISTERED REPRESENTATIVE FOR THE CUSTOMER'S ACCOUNTS. THE CUSTOMER DIED. VANNOY VISITED THE CUSTOMER'S HOME SHORTLY AFTER HE DIED, SERVED AS A PALL BEARER AT HIS FUNERAL, AND PARTICIPATED IN A MEETING WITH THE CUSTOMER'S HEIRS TO DISCUSS HIS ESTATE. VANNOY THEN OPENED A SOLE PROPRIETORSHIP ACCOUNT FOR HIS COMPANY IN THE CUSTOMER'S NAME. BOTH THE SIGNATURE PAGE OF THE ACCOUNT APPLICATION AND A NOTARIZED SOLE PROPRIETOR AFFIDAVIT FOR THE ACCOUNT APPEARED TO HAVE BEEN SIGNED BY THE CUSTOMER. VANNOY DEPOSITED APPROXIMATELY $20,750 OF THE CUSTOMER'S PERSONAL FUNDS AND FUNDS FROM THE CUSTOMER'S FIRM ACCOUNTS INTO HIS COMPANY'S ACCOUNT. DURING THE SAME PERIOD, VANNOY CAUSED THE ENTIRE AMOUNT TO BE PAID FROM THAT ACCOUNT DIRECTLY TO HIS COMPANY. VANNOY DID SO BY MEANS OF A LETTER OF AUTHORIZATION REQUESTING THAT THE FIRM SEND A CHECK FOR $3,200 TO HIS COMPANY, AND BY A SERIES OF CHECKS TOTALING $17,550 FROM THE COMPANY'S ACCOUNT CHECKBOOK MADE PAYABLE TO VANNOY'S COMPANY. THE LETTER OF AUTHORIZATION AND THE CHECKS ALL APPEARED TO HAVE BEEN SIGNED BY THE CUSTOMER. VANNOY THEN WITHDREW THE FUNDS FROM HIS COMPANY'S ACCOUNT AND DEPOSITED THEM INTO HIS PERSONAL CHECKING ACCOUNT, WITHOUT HAVING OBTAINED AUTHORIZATION FROM THE CUSTOMER BEFORE HE DIED, OR FROM THE EXECUTRIX OF THE CUSTOMER'S ESTATE. AN ACCOUNT WAS OPENED AT THE FIRM FOR THE ESTATE OF THE CUSTOMER AND SHORTLY THEREAFTER, THE FIRM BEGAN AN INVESTIGATION INTO VANNOY'S CONDUCT, AND HE CEASED MAKING WITHDRAWALS FROM HIS COMPANY'S ACCOUNT. VANNOY SUBMITTED DOCUMENTATION WITH FALSE INFORMATION TO THE FIRM'S IRA PROCESSING DEPARTMENT TO LIQUIDATE AN ANNUITY HELD IN THE CUSTOMER'S IRA. THE DOCUMENTATION INCLUDED A DEATH CERTIFICATE THAT WAS ALTERED TO MAKE IT APPEAR THAT THE CUSTOMER'S DEATH OCCURRED ON OCTOBER 27, 2008, AND THAT THE CERTIFICATE WAS ISSUED ON OCTOBER 31, 2008. ACTUALLY, THE CUSTOMER DIED ON JULY 17 AND THE DEATH CERTIFICATE WAS ISSUED ON JULY 29, 2008. VANNOY FAILED TO APPEAR AND PROVIDE TESTIMONY AS REQUESTED BY FINRA. VANNOY DID NOT RESPOND, DID NOT REQUEST THAT THE INTERVIEW BE RESCHEDULED, AND DID NOT APPEAR AND PROVIDE TESTIMONY AS REQUIRED. DECISION BECAME FINAL FEBRUARY 10, 2012.