Library - Law Offices of Robert Wayne Pearce

Wells Fargo Stockbroker Suspended for Unsuitable Recommendations

Richard Stephen Hughes submitted a submitted of Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) in which he was fined and suspended for unsuitable recommendations. In October of 2011, Hughes registered as a General Securities Representative and General Securities Principal with Wells Fargo. According to FINRA, between April 2015 and May 2016 Hughes made unsuitable recommendations to a customer resulting in short-term switches between Unit Investment Trusts (UITs) and Class A-share mutual funds. The findings stated these recommendations were unsuitable because of the frequency and cost of the transactions. The findings also stated that the customer’s account incurred over $34,000 in excessive commissions and fees and that Hughes created a script containing false statements for the customer to use if contacted by the firm about the transactions made. Hughes’ conduct violated FINRA Rules 2111 and 2010.

Dec 28, 2018

Merrill Lynch Stockbroker Suspended for Impersonation of Client

Luke A. Eddy of Worcester, Massachusetts submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) in which he was in violation of FINRA Rule 2010. Luke A. Eddy joined Merrill Lynch, Fenner and Smith, Inc in August 2014 as a General Securities Representative. According to FINRA, Eddy was terminated in June 2017 for posing as a client during a call with his member firm in order to transfer funds from the customers Individual Retirement Account (IRA) to her bank account. The findings stated that when the firm rejected the initial transfer fund, Eddy forged the customer’s signature allowing the firm to approve the distribution and transfer $3,400 from the customer’s firm IRA to her bank account. Due to suspicion that Eddy may have impersonated the customer’s signature, the firm did not process the payment.

Dec 26, 2018

BB&T Stockbroker Fined for Unsuitable Trading

Geoffrey Colin Turner, of Tybee Island, Georgia, submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) in which he was fined and suspended for recommending certain L-share variable annuities. In October 2006, Turner joined BB&T as a General Securities Principal. During the period of December 2014, through June 2015 Turner allegedly recommended certain L-share variable annuities to 15 customers without having a reasonable belief these recommendations were suitable. According to FINRA, Turner recommended his customers purchase higher-cost share class contracts without understanding the costs and benefits. The findings stated that Turner did not understand that the L-share class would be more expensive than the B-share class for customers who held their annuities for at least seven years. The findings also stated that Turner was unable to inform his customers of the various features of the products due to his lack of understanding the L-share class annuities.

Dec 21, 2018

Former BAC Florida Stockbroker Supervisor Suspended for Misconduct

Jose Luis Leon, of Palmetto Bay, Florida, submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) for allegedly violating NASD Rule 3010 and FINRA Rule 2010. Leon was employed with BAC Florida Investments Corp. (BAC Florida) from December 1987 until his termination in February 2017. During the period between July 2013 and November 2014, Leon served as BACs Chief Compliance Officer. Leon was responsible for supervising and reviewing the trading activities of the firm’s former CEO and Head Trader. The findings stated that the Fixed Income Investigation staff of FINRA’s Department of Market Regulation reviewed certain fixed income securities transactions that BAC Florida made through its former CEO and Head Trader. FINRA investigated Leon’s supervision over the former CEO and Head Trader’s trading activities. According to FINRA, Leon failed to supervise and review the prohibited trading activities of both the CEO and Head trader, instead he allowed them to review their own activities.

Dec 19, 2018

NTB Financial Corporation Broker Suspended

George Louis McCaffrey III, a former registered stockbroker submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) in which he has been fined and suspended for participating in private securities transactions. McCaffrey was registered with NTB Financial Corporation as a general securities representative and agent from July 1989 until his termination in October 2017. According to FINRA, Mr. McCaffrey participated in a total of 22 undisclosed private transactions, in which ten investors purchased $1,775,000 in debt and equity securities without first providing notice to his firm. The findings stated that McCaffrey introduced these customers to representatives of a greenhouse building and leasing company, so they would make an investment. McCaffrey allegedly reviewed and edited the documents for the investment and forwarded investment-related documents to the customers. The findings stated that the investors purchased $1,775,000 in promissory notes and McCaffrey received $124,250 in commissions from these transactions. In addition, FINRA stated McCaffrey incorrectly indicated that he had not participated in private securities transactions.

Dec 17, 2018

Former Morgan Stanley Broker Suspended for Unsuitable Trading of UITs

Lloyd Thomas Layton, a former registered stockbroker submitted a Letter of Acceptance, Waiver and Consent (AWC) by the Financial Industry Regulatory Authority (FINRA) for allegedly engaging in an unsuitable pattern of short-term trading of unit investment trusts (UITs). Layton was registered from June 2009 to March 2015 as a General Securities Representative of Morgan Stanley. According to FINRA, Layton repeatedly engaged in an unsuitable pattern of short-term trading of UITs in a total of 54 customer accounts. Mr. Layton allegedly recommended that these customers purchase then sell their UITs before their maturity date. In addition, Layton also recommended his customers to use the proceeds from a short term sell of a UIT and purchase another with similar or identical investment objectives. Due to Layton’s unsuitable recommendations, his customers incurred unnecessary charges.

Dec 14, 2018

Wells Fargo Advisor Suspended for Private Transaction Violation

Earle Clement Tingley, a former registered representative with Wells Fargo, submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) in which he was in violation of Rule 3240(a), assessed a deferred fine of $5,000 and suspended for 45 days. According to FINRA, Tingley was a general securities representative of Wells Fargo Advisors (WFA) from January 2008 until May 2014. He registered with FINRA through Wells Fargo Advisors Financial Network (WFAFN). In May of 2018, WFAFN filed a U-5 form disclosing Tingley’s Termination. During his time with WFA, Tingley allegedly borrowed $35,000 from a customer without notifying or seeking approval from his firm. The findings also stated that Mr. Tingley did repay the customer prior to detection by his firm but did not document the loan or terms for repayment.

Dec 12, 2018

Transamerica Broker Suspended for Unauthorized Trading

Roy Aurelio Gaytan, of Moorpark, California, submitted a Letter of Acceptance Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) in which he was fined and suspended for unauthorized trading. In January 2012, Gaytan was registered as a representative of Transamerica Financial Advisors, Inc. until June 2017. During this period, Gaytan allegedly recommended that his customer establish a self-directed account with another firm. The customer then gave him de facto control over his account and he began using discretionary authority to execute securities transactions in the customer’s brokerage account at another firm. After sustaining losses in the account, the customer complained to Gaytan’s firm. Per FINRA, when questioned Mr. Gaytan admitted to executing discretionary trades in the account without providing disclosure to both firms resulting in his termination. Because of the foregoing conduct, Gaytan violated NASD Conduct Rule 3050(c) and FINRA Rule 2010. FINRA stated that Gaytan also violated rule 8210 by failing to respond to letters requesting information (Any person subject to FINRA’s jurisdiction must provide information if requested with respect to any matter involved in the investigation, complaint, examination, or proceeding.)

Dec 10, 2018

Wells Fargo Employee Terminated for Outside Business Activities

Darnell Kenneth Mote submitted a Letter of Acceptance Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) in which he was suspended from association with any FINRA member in all capacities for 20 days and fined $5,000. In June 2012, Mr. Mote joined the securities industry and became associated with Wells Fargo Advisors. According to FINRA, the firm filed a Uniform Termination Notice for Securities Registration reporting Mote’s termination on November 4, 2015. Mr. Mote allegedly engaged in outside business activity without providing notice to his firm. The firm’s policies require all associated persons to seek approval in writing before engaging in outside activity, which is what Mr. Mote failed to do.

Nov 28, 2018

E.J. Sterling Broker Suspended for Engaging in Unsuitable Trading

Akhil Morada a former registered stockbroker submitted a Letter of Acceptance, Waiver and Consent (AWC) in which Morada was assessed a deferred fine of $15,000, suspended by the Financial Industry Regulatory Authority (FINRA) for a period of 12 months, and ordered to pay $55,555.56, plus interest, in deferred restitution to customers. Akhil Morada joined the firm E.J. Sterling in January 2014 as a General Securities Representative and was employed until April 2015. According to FINRA, during this time Mr. Morada engaged in quantitatively unsuitable trading in the accounts of three customers in violation of NASD Rule 2510(b) and FINRA Rules 2111 and 2010. The findings stated that Mr. Morada recommended the trading in the customers’ accounts and they gave him de facto control over the accounts. During this period, these accounts sustained a loss of $55,555.56. FINRA also accused Mr. Morada of exercising discretion in the three customers’ accounts without obtaining written authorization from both the customers and the firm’s acceptance in writing.

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