Articles Tagged with unsuitability

Bull Bear The Financial Industry Regulatory Authority (FINRA) has fined and suspended a former Cetera Advisors broker in Tucson, Arizona for failing to invest his customers’ funds in a way that would have qualified for mutual fund breakpoint discounts, according to a settlement finalized on Thursday and as reported on Advisor Hub and broker check.

Allegedly, from April 2014 and September 2019, Todd R. Anderson recommended that an elderly customer purchase $1 million worth of mutual funds across 31 fund families without considering that the customer could have qualified for volume-based “breakpoint” discounts if he had invested in fewer, according to Finra. As a result, the customer incurred $20,867 in unnecessary sales charges, the regulator said in the settlement.


Merrill terminated 38-year Birmingham, Alabama based Advisor after settling a customer claim for $4.25 million, according to Advisor Hub and FINRA Brokercheck.

Merrill fired the advisor for “conduct including making an unsuitable investment strategy recommendation and misrepresentation to a client” tied to an options investment and also for failing “to follow Firm standards related to business communications,” according to BrokerCheck.

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The Financial Industry Regulatory Authority hired an “independent” law firm to conduct a review of its arbitrator selection procedures after a Judge rebukes FIRNA in an order vacating a Wells Fargo award in a controversial case, according to FINRA.

Finra, whom denied any flaw in its process, hired the law firm of Lowenstein Sandler after a scathing order to vacate a Wells Fargo award.  The Judge had said Finra and Wells Fargo’s lawyer appeared to have a secret agreement to strike potential arbitrators from a neutral list and questioned the fairness of the process.

The concerns were reiterated by the Public Investors Advocate Bar Association, which called for “an immediate investigation” by the Securities and Exchange Commission and hearings in Congress, and by Senator Elizabeth Warren (D-Mass.) and Rep. Katie Porter (D-Calif.) in a February 10 letter.

According to Advisor Hub, the Financial Industry Regulatory Authority has censured and imposed a $950,000 fine on Merrill Lynch Wealth Management for allegations that they engaged in ignoring flaws in its fraud detection systems allowed for two of their brokers to steal $6 million from clients.

“Merrill’s systems did not properly screen Automated Clearing House transfers from customers’ accounts to detect when one of its registered representatives was the beneficiary of those transfers,” FINRA said. Merrill’s internal fraud-detection system was only “designed to detect fraud by third parties” or “persons other than its own brokers,” it continued.

cropped-High-Res-TA-2018-2019-284x300According to Advisor Hub and FINRA Website, in a decision overturning an arbitration award, a Georgia state court judge vacated an Arbitration decision in which Wells Fargo successfully beat an investor’s $1.7 million damage claims over investment losses.

According to the Order, Judge Belinda E. Edwards based her ruling in part on grounds that the Financial Industry Regulatory Authority administrators had allowed Wells Fargo and an outside lawyer to “manipulate” the arbitrator selection process. The article in Advisor Hub notes that “A Finra dispute resolution director improperly granted Wells Fargo’s request to strike two arbitrators, including one from a computer-generated “neutral” list, as part of an unwritten side agreement between the regulator and Wells’ lawyer.”

“Permitting one lawyer to secretly red line the neutral list makes the list anything but neutral, and calls into question the entire fairness of the arbitral forum,” Judge Edwards wrote in the January 25 ruling.

Miller Stern Lawyers is currently investigating claims against J.P. Morgan. According to Advisor Hub and industry records, J.P. Morgan Advisors was ordered to pay $4 million in damages to a former client in their San Francisco office.

Industry records confirms that Lacey Winston Keath alleged unsuitability in filings against J.P. Morgan’s traditional brokerage unit in high-risk equities and junk bonds–without authorization, according to the Financial Industry Regulatory Authority award.

A J.P. Morgan spokeswoman declined to comment on the arbitration outcome or underlying dispute.

Bull BearMiller Stern Lawyers – 410-Law-Firm is currently investigating clients of Transamerica and all firms and broker dealers who may be victims of, and suffered damages and losses, due to abuses such as failure to supervise, breach of fiduciary duty, overcharging , and unauthorized trading.

As posted from FINRA.ORG

“Firm Ordered to Pay $4.4 Million in Restitution to Approximately 2,400 Affected Customers

Bull BearFINRA’s ongoing campaign to rein in alleged sales abuses involving short-term trading of unit investment trusts in customer accounts has led a 23-year veteran advisor to accept a $10,000 fine and three-month suspension.

Miller Stern Lawyers – 410-Law-Firm is currently investigating clients of Stifel Nicolaus and all firms and broker dealers who may be victims of, and suffered damages and losses, due to abuses such as short-term trading of unit investment trusts, breach of fiduciary duty, overcharging , and unauthorized trading.

cropped-High-Res-TA-2018-2019-284x300FINRA fined a small independent broker-dealer in California $35,000 for failing to adequately conduct background investigations on registered reps and for failing to obtain regulatory pre-approval for a seven-month growth spurt, according to Advisor Hub.

Infinity Financial Services, an Oakland, CA-based firm founded 13 years ago by a former Merrill Lynch broker, failed to contact former employers and had no procedures for conducting searches of public records, according to an “acceptance, waiver and consent letter” it signed with Finra.

It hired as many as 16 registered reps over three years through April 2017 without searching their Central Registration Depository records, including five who had pending bankruptcies, judgments and tax liens that Infinity failed to detect, Finra said.

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