On April 23, 2019, a division of insurance hearing officer issued a choice revoking the nonresident producer license of Alex Drawve, formerly of Springfield, Illinois, for his failure to disclose a legal conviction on his 2015 nonresident producer license software to Massachusetts and his failing to report the revocation of his nonresident producer license by the state of California to the commissioner of insurance as required by Massachusetts regulation.
The division of insurance coverage listening to officer, Kristina A. Gasson, entered an order towards Mr. Drawve revoking his insurance coverage licenses in Massachusetts and ordering him to eliminate any interests in Massachusetts as a proprietor, associate, stockholder, officer, or employee of any licensed insurance producer. Additionally, hearing officer Gasson fined Mr. Drawve $1,500.
- 1 FINRA legal report inquiry leads to resignation and California license revocation
- 2 Massachusetts strikes to revoke Mr. Drawve’s license for failure to reveal and failure to report
- 3 Revocation ordered but most high quality limited to misrepresentation to division violation
- 4 The listening to officer assesses totally different fines for each violation.
- 5 Remaining orders entered
FINRA legal report inquiry leads to resignation and California license revocation
Alex Drawve entered the securities business in September 2015 when he turned associated with FINRA member Horace Mann Buyers, Inc. (“HM Buyers”). On November 20, 2015, Horace Mann filed an preliminary Type U4 on his behalf. Mr. Drawve held Collection 6, and Collection 63 licenses for his sales work with Horace Mann.
On the time, Mr. Drawve turned associated with HM Buyers; a nonFINRA member affiliate of Horace Mann already employed him, and that agency had not confirmed whether or not he had a felony history.
A felony report examine would have shown that Mr. Drawve had pleaded responsible on March 31, 2014, in the McLean County Illinois Circuit Courtroom to a class 4 felony involving the Manufacture/Delivery—Hashish—10-30 Grams. The courtroom sentenced him to twenty-four months on probation, thirty hours of group service, and $2509 in courtroom costs.
When Horace Mann filed the preliminary FINRA November 2015 registration Type U4 on Mr. Drawve’s behalf, Mr. Drawve did not disclose that he had pled responsible to a felony in that initial Type U4, or in the different three Type U4 amendments with FINRA he filed between December 1, 2015, and February eight, 2016.
Though Mr. Drawve’s crime was not investment associated, he was still topic to a statutory disqualification for selling securities as a consequence of his March 2014 felony conviction.
After FINRA initiated an inquiry relating to Mr. Drawve’s legal history, Mr. Drawve disclosed on his Type U4 for the first time that he had been charged and convicted of a felony in an amendment filed on February 29, 2016.
Mr. Drawve voluntarily resigned from Horace Mann on April 13, 2016, after the agency advised it will not continue his registration. On April 15, 2016, the firm filed a Type U5 terminating Drawve’s registrations.
On July 18, 2016, FINRA accepted Mr. Drawve’s “Letter of Acceptance, Waiver, and Consent,” through which Mr. Drawve admitted that he had “willfully did not timely disclose that he was charged with and convicted of a non-investment-related felony in violation of Article V, Section 2(c) of FINRA’s By-Legal guidelines and FINRA Guidelines 1122 and 2010.”
As part of the settlement, FINRA assessed a deferred fantastic of $5,000 and suspended from association with any FINRA member in any capacity for six months. Beneath the settlement phrases, the deferral of the $5,000 nice terminated upon Mr. Drawve’s reassociation with a FINRA member agency, or request for aid from any statutory disqualification ensuing from the settlement or some other continuing.”
Mr. Drawve had held from 2015, a nonresident producer license with the California Division of Insurance coverage as an accident and health agent and life-only agent with variable contracts authority. On March 10, 2017, this division of insurance issued an “Order of Abstract Revocation” based mostly on the FINRA disciplinary motion displaying that Mr. Drawve “is lacking in integrity and constitutes grounds for the Insurance Commissioner to droop or revoke the license and licensing rights.”
Massachusetts strikes to revoke Mr. Drawve’s license for failure to reveal and failure to report
The Massachusetts Division of Insurance coverage started its proceedings towards Mr. Drawve on September 20, 2017, by its ordinary process of issuing an Order to Show Trigger.
The division sought license revocation based mostly upon Mr. Drawve’s failure to reveal his felony charge on his unique license software and his failure to report the California administrative action towards his insurance coverage license inside the time prescribed in G. L. c. 175, §162V. The division additionally sought fines, in addition to license revocation, based mostly upon Mr. Drawve’s violations of G.L. c. 175, §162R (a)(1), (a)(2) and (a)(9).
Mr. Drawve didn’t respond to the Order to Show Cause or in writing to the division’s subsequent motion for summary choice. Neither he nor any individual purporting to symbolize him appeared on the listening to on December 1, 2017.
The quantity and the seriousness of the grounds the Division cites for taking disciplinary action towards Drawve absolutely warrant its request to revoke his Massachusetts producer license. Listening to Officer Gasson
Revocation ordered but most high quality limited to misrepresentation to division violation
On the default, the hearing officer accepted the documentary evidence referring to the FINRA settlement and the California license revocation. It was undisputed that Mr. Drawve had not reported the California administrative motion towards him as required by Massachusetts regulation.
On the charge of a false statement on his software to the Massachusetts Division of Insurance, the listening to officer found that Mr. Drawve had submitted the Uniform Software for Particular person Producer License (“Uniform Software”) to the Massachusetts division and different state insurance regulators on June 15, 2015.
Background Question 1b on the Uniform Software requested whether or not Mr. Drawe had ever been convicted of a felony, had a judgment withheld or deferred, or was at present charged with committing a felony. Mr. Drawve answered “no.”
Although the McLean County Circuit Courtroom had withheld judgment on Mr. Drawve’s guilty plea, positioned him probation and finally dismissed the charge, Mr. Drawve had an obligation to reveal the felony charge in response to the Uniform Software’s question.
The listening to officer discovered on the Question 1b response that Mr. Drawve made:
…the report absolutely helps the Division’s declare the Drawve offered incorrect and materially untrue info on his software for an insurance coverage producer license. He is subsequently subject to discipline beneath [G.L. c.175, § 162R] subsection (a)(1).”
The listening to officer assesses totally different fines for each violation.
On the wilful misstatement on the Uniform Software, the hearing officer found that the place Mr. Drawve submitted this producer software to the Massachusetts Division, he had dedicated an unfair and misleading act within the enterprise of insurance coverage beneath G.L. c. 176D. Part 7 of this statute offers for as much as a $1 thousand advantageous for every violation, and the hearing officer assessed the utmost high quality of $1 thousand.
On the failure to report the California revocation to the commissioner inside thirty days as required underneath G.L. c. 175, § 162R(a)(2), the hearing officer did not agree with the division. She was not persuaded that the failure to report an action occurring in another state fell with the circumstances for an enhanced high-quality beneath G.L. c. 176D. As an alternative, the hearing officer set a nice for the failure to report the California revocation underneath G.L. c. 175, § 194.
This statute, G.L. c. 175, § 194, applies the place the insurance coverage legal guidelines haven’t any particular penalty, as is the case with § 162R(a)(2).
The hearing officer imposed the utmost high-quality underneath § 194, of $500 towards Mr. Drawve for his failure to report the California revocation to the commissioner of insurance.
Additionally, the listening to officer found on the division’s different request for self-discipline towards Mr. Drawve:
The number and the seriousness of the grounds the Division cites for taking disciplinary motion towards Drawve absolutely warrant its request to revoke his Massachusetts producer license. On this report, I find that, in addition to revocation of his license, Drawve must be prohibited from transacting any insurance coverage enterprise or buying, in any capacity in any way in Massachusetts, any insurance coverage enterprise in Massachusetts and shall eliminate any pursuits he might have in any insurance business in Massachusetts.”
Remaining orders entered
The final orders entered towards Mr. Drawve by the hearing officer have been:
ORDERED: That any insurance coverage producer license issued to Alex Drawve by the Division is hereby revoked; and it’s
FURTHER ORDERED: That, inside ten (10) days of this choice, Alex Drawve shall return to the Division any license in his possession, custody or management; and it is
FURTHER ORDERED: That Alex Drawve is, from the date of this order, prohibited from immediately or not directly transacting any insurance enterprise or acquiring, in any capability by any means, any insurance business in Massachusetts; and it’s
FURTHER ORDERED: That Alex Drawve shall adjust to the provisions of M.G.L. c. 175, §166B and eliminate any and all interests in Massachusetts as proprietor, associate, stockholder, officer or worker of any licensed insurance coverage producer; and it is
FURTHER ORDERED: That Alex Drawve shall pay a wonderful of One Thousand Five Hundred Dollars ($1,500) to the Division inside 30 days of the date of this determination and order.
FURTHER ORDERED: that Alex Drawve shall pay a positive of One Thousand Five Hundred Dollars ($1,500) to the Division inside 30 days of the date of this determination and order.