The CFP Board has taken public action against six of its CFP certificants, including three revocations, two suspensions and a public letter of admonition.

The CFP Board announced Sept. 28 that it revoked privileges to use the CFP certification marks for Robert E. Barth of Laguna Niguel, Calif.; Rick D. VanVleet of Fort Collins, Colo.; and Richard C. Dergance of Las Vegas, Nev. A one-year suspension was issued to Edwin H. Jaffe of Memphis, Tenn., and a six-month suspension was issued to Christopher A. Root of Edina, Min. A public letter of admonition was issued to Kevin K. Kroskey of New Royalton, Ohio.

All of the suspensions occurred after a July hearing before the CFP Board’s Appeals Committee of a July 2008 decision by CFP Board’s Disciplinary and Ethics Commission.

Barth’s case

Robert E. Barth had his CFP certification mark privileges permanently revoked after the CFP commission’s investigation of a grievance filed by his former client with CFP Board. After a hearing, the commission found that Barth failed to secure any information about a client’s needs and objectives; commingled a client’s funds in Barth’s business account; failed to review and recommend changes to a client’s living trust documents; failed to return a client’s documents; charged a client inappropriately; failed to disclose compensation arrangements to a client in writing; and failed to act as a fiduciary on behalf of a client.

VanVleet’s case

Rick D. VanVleet had his privileges permanently revoked after the commission found he operated a fraudulent investment scheme in violation of Colorado laws.

In March 2008, VanVleet was indicted by the Colorado Attorney General’s Office on five counts of securities fraud and two counts of theft over $15,000. The indictment alleged that VanVleet engaged in an investment fraud scheme where he sold promissory notes to investors and then failed to fulfill the obligations pursuant to the promissory notes. VanVleet pleaded guilty to one count of securities fraud, and all remaining charges were dropped. He was sentenced to 10 years in prison for operating a fraudulent investment scheme.

Dergance’s case

Richard C. Dergance had his privileges permanently revoked following the CFP Board’s investigation of a 2007 civil lawsuit and 2008 Financial Industry Regulatory Authority (FINRA) regulatory action related to Dergance’s 2003 sale to clients of $185,300 in investments in a 36-month real estate promissory note.

The promissory note was offered by a broker-dealer for whom Dergance claimed he never worked. According to a Letter of Acceptance, Waiver and Consent agreement Dergance entered into with FINRA, he received $18,541 in total commissions related to the sale of the promissory notes. The promissory notes were not registered as securities at the time of the sales, and the clients were not customers of Dergance’s broker-dealer. He did not give his broker-dealer prior written notice about the promissory note transactions with the clients. The other broker-dealer defaulted on the promissory notes for all of its investors. According to the consent agreement, Dergance was issued a four-month suspension and $5,000 fine, and ordered to disgorge a total of $18,541 in commissions, plus interest, to his clients. FINRA found that Dergance violated NASD Conduct Rules 2110 and 3040.

He failed to file a response to the allegations in CFP Board’s Complaint, and after a July hearing, CFP Board deemed those allegations admitted.

Jaffe’s case

Edwin H. Jaffe’s right to use the CFP certification marks was suspended after its investigation of an internal review of Jaffe’s former employer initiated in January 2005 relating to his outside business activities. Mr. Jaffe’s employer found that he violated firm policies by failing to disclose or obtain firm approval for his outside business activities. Jaffe’s employer, who was not identified, permitted him to resign. He later entered into a Letter of Acceptance, Waiver and Consent with NASD, now FINRA, consenting to findings that he participated in private securities transactions without providing his employer prior written notice of the proposed transactions. In the consent agreement, FINRA determined that Jaffe violated NASD Conduct Rules 2110 and 3040. He was fined $20,000 and suspended from association with any NASD member in any capacity for nine months.

Jaffe failed to notify CFP Board of his suspension within 10 calendar days of the date on which he was notified of the suspension, as required. He was suspended from Aug. 10 to Aug. 10, 2010.

Root’s case

Christopher A. Root had his privileges to use the CFP certification marks suspended for six months after an investigation into whether Root was the subject of a customer complaint and if he identified himself as a CFP certificant prior to becoming certified.

In September 2008, Mr. Root’s application for initial CFP certification was reviewed by CFP Board. During a routine background check, CFP Board discovered a customer complaint filed against Root. In correspondence with CFP Board during its investigation, Root identified himself as a CFP certificant, even though he had not been certified by CFP Board. The commission found no violations in relation to the customer complaint. The commission found that his identification as a CFP certificant prior to certification violated Rule 601 of CFP Board’s Code of Ethics and Professional Responsibility. Root’s suspension began Aug. 10 and ends Feb. 10, 2010.

Kroskey’s case

Kevin K. Kroskey received a letter of admonition for his October 2002 conviction federal court for felony conspiracy to possess with intent to distribute Methylenedioxymethamphetamine, commonly known as Ecstasy, and his failure to report his conviction to the Ohio Department of Insurance within 30 days from the date of his conviction.

Kroskey served 13 months in prison after being sentenced to 51 months imprisonment followed by three years of supervised probation. After serving one year of probation, Kroskey was discharged from probation due to his completion of ordered conditions and outstanding compliance.

In the second matter, in October 2007, the Ohio Department of Insurance issued Kroskey a notice of the department’s intent to suspend, revoke, or refuse to renew his license as an insurance agent. The grounds for the action were Mr. Kroskey’s felony conviction and his failure to report the felony conviction within 30 days to the superintendent of insurance. In January 2008, a hearing was held by the Ohio Department of Insurance, and the hearing administrator found that Kroskey had been rehabilitated and will continue to be licensed as an insurance agent in the State of Ohio. The report also found Kroskey in violation of Ohio law for not reporting his felony conviction within 30 days of the disposition, and recommended a civil penalty of $500 and administrative costs of $250.

The commission determined that Kroskey’s conduct violated Rule 606(a) of CFP Board’s code. In mitigation, the commission considered the following factors: Kroskey’s violation of Ohio law for late reporting of his felony conviction was due to his incarceration; the conduct at issue took place when Kroskey was a college student, long before he began his financial services career, and does not reflect his current level of commitment to his profession and his community; and Kroskey’s career has suffered and will continue to suffer due to his past conduct.