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Jun 30, 2014

Moloney Securities Fined by FINRA for Unsuitable ETF Recommendations

Moloney Securities Co, Inc. of Manchester, Missouri consented to, but did not admit to or deny, the described sanctions and to the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that it failed to establish a supervisory system with regard to the sale of non-traditional exchange-traded funds (ETFs). According to FINRA, Moloney Securities permitted its representatives to recommend and sell non-traditional ETFs to customers even though the firm neglected to provide its supervisors or its representatives with training or guidance as to whether these complex and risky investments were suitable for the investors. FINRA’s findings stated that Moloney Securities neither utilized nor made available to supervisory personnel reports or other tools to monitor length of time the ETFs were held or the losses which occurred in those hold positions. Consequently, Moloney Securities was censured and fined $20,000.

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Jun 26, 2014

Infinex Investments Fined and Ordered to Pay Restitution to Customers Over Unsuitable ETF Recommendations

Infinex Investments, Inc. (Infinex) of Meriden, Connecticut consented to, but did not admit to or deny, the described sanctions and to the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that it neglected to perform reasonable due diligence regarding the sale of non-traditional exchange-traded funds (ETFs). According to FINRA, Infinex failed to properly review non-traditional ETFs prior to offering them for sale to customers. FINRA found that the firm allowed its representatives to recommend the ETFs to customers even though those representatives had minimal training on the risks and features of non-traditional ETFs, thereby making unsuitable recommendations and putting customers at unnecessary risk for investment losses. Consequently, Infinex Investments was censured, fined $75,000 by FINRA, and ordered to pay more than $287,000 in restitution to customers.

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Jun 25, 2014

Dawson James Securities Fined by FINRA For Inadequate Supervision

Dawson James Securities, Inc. (Dawson James) of Boca Raton, Florida consented to, but did not admit to or deny, the described sanctions and to the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that it’s written supervisory procedures (WSPs) did not meet the minimum requirements in several areas, resulting in a $75,000 fine by FINRA.

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Jun 24, 2014

No Excuses – How Robert Wayne Pearce Stared Down Personal Disaster

In this year’s Florida edition of Super Lawyers magazine, Harris Meyer wrote a featured article entitled “No Excuses – How Robert Wayne Pearce Stared Down Personal Disaster.” I am humbled to be recognized by the Florida Super Lawyers editorial staff and grateful to Harris Meyer for his talent in capturing some of the highlights of my career. Finally, I want to thank those of you who were interviewed and contributed to the story.

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Jun 23, 2014

Carolina Financial Securities Fined For Failure to Supervise the Sale of Private Placements

Brevard, North Carolina-based Carolina Financial Securities, LLC (Carolina Financial) consented to, but did not admit to or deny, the described sanctions and to the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that it failed to supervise the sale of an unregistered private placement offering to investors with investments of approximately $1.1 million. FINRAs findings stated that Carolina Financial neglected to follow its procedures with regard to the review and verification of statements made in private placement offering documents. Furthermore, FINRA found that the brokerage firm failed to conduct adequate due diligence prior to the approval of the offering for sale to its investors.

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Jun 20, 2014

Raymond James Broker Barred by FINRA for Alleged Ponzi Scheme

Claus Foerster, a Greenville, South Carolina-based stockbroker formerly employed by Raymond James, has been barred by the Financial Industry Regulatory Authority (FINRA) for allegedly running a Ponzi scheme. FINRA’s complaint alleged that Mr. Foerster had solicited investments for a purported investment fund known as S.G. Investments, which was actually a bank account controlled by Mr. Foerster. FINRA further alleged that Mr. Foerster instructed thirteen (13) customers to move funds from their brokerage accounts to their personal bank accounts and then write checks payable to S.G. Investments. FINRA accused Claus Foerster of stealing nearly $3 million from the clients since 2000. Mr. Foerster signed a letter accepting FINRA’s punishment without admitting or denying FINRA’s allegations.

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Jun 19, 2014

FINRA Slams Bank of America Merrill Lynch with $8 Million Fine and $89 Million Restitution Order for Mutual Fund Charges

The Financial Industry Regulatory Authority (FINRA) slammed Bank of America Merrill Lynch with an $8 million fine and an $89 million restitution order for failing to waive mutual fund sales commission charges related to certain charities and retirement accounts. Merrill Lynch agreed to the settlement without admitting or denying FINRA’s findings that even though most of the mutual funds on Merrill Lynch’s retail platform waive certain fees for eligible retirement plans and charities, the firm failed to make sure its advisers were properly applying those waivers to as many as 41,000 accounts. FINRA further stated that Merrill Lynch’s written supervisory procedures provided little information or guidance on mutual fund sales charge waivers.

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Jun 17, 2014

Uncapped Indexed Annuities Are Not the Next Big Thing for Investors

Indexed annuities sales have grown exponentially over the last couple of years as agents and brokers are recommending them as fixed income or guaranteed lifetime withdrawal components of investors’ portfolios. In fact, first quarter sales of indexed annuities hit $10.9 billion, which is up by approximately 39% from the year-ago period, according to investment news sources. Now, as broker-dealers unveil “uncapped indexed annuities,” a product that purports to give conservative clients a way to benefit from surging equity markets without limitations while protecting downside risk, investors are urged to remain wary in order to detect misrepresentations and avoid misunderstandings related to the product.

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Jun 9, 2014

FINRA Fines and Suspends Jon Larson for Unauthorized ETF Sell Order

Jon Fred Larson, a Lakeland, Florida-based securities representative formerly employed by Allen & Company of Florida, Inc. (Allen & Co.), also of Lakeland, Florida, submitted a Letter of Acceptance, Waiver and Consent in which he consented to, but did not admit to or deny, the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that he entered an unauthorized sell order for an Allen & Co. customer who held an exchange traded fund (ETF) which was valued at approximately $16,000 in his account. Jon Larson allegedly entered the ETF sell order without the customer’s knowledge, consent or authorization. Consequently, Mr. Larson was assessed a deferred fine of $5,000 and suspended from association with any FINRA member in any capacity for 10 business days. The suspension was in effect from March 17, 2014 through March 28, 2014.

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May 27, 2014

Timothy Moran Barred by FINRA for Selling Away Hedge Fund

Timothy Damien Moran, a former Paradise Valley, Arizona-based broker employed by Atlanta, Georgia-based FSC Securities Corporation, has been barred by the Financial Industry Regulatory Authority (FINRA) based on findings that Mr. Moran engaged in private securities transactions without providing his firm with prior written notice. FINRA’s findings stated that Mr. Moran introduced firm customers to a Thomas Hampton to discuss possible investment in Mr. Hamptons’ hedge fund, Hampton Capital Management (HCM). Mr. Moran recommended that the customers invest, or consider investing, in HCM. Some of the customers who Mr. Moran introduced to the individual invested approximately $1.69 million. Mr. Moran also invested a total of $150,000 in HCM.

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