Favors for friends are not unusual, but a Notary for a national stock brokerage found out the price for such a favor can be steep when it involves breaking the rules of proper notarization.
The Financial Industry Regulatory Authority (FINRA), an independent industry organization that regulates US securities firms, fined the California Notary $5,000 and suspended her from working in the securities industry for 90 days after she notarized documents outside the signers’ presence. The Notary also was fired by her employer.
The trouble began when a colleague — who worked at another brokerage — asked the Notary to notarize documents purportedly signed by three clients seeking loans against their insurance policies. The former colleague had actually forged the signatures and pocketed the proceeds of the loans.
Apart from violating state law, the Notary’s conduct violated FINRA regulations that require members to “observe high standards of commercial honor and just and equitable principals of trade.” Additionally, the Notary may be subject to action from the California Secretary of State’s office as well as the three individuals harmed by the forged documents.