Unsuitable UIT Recommendation Lawyer - Law Offices of Robert Wayne Pearce

Jun 16, 2017

Stifel Nicolaus Broker Suspended for Unsuitable UIT Recommendations to 83 Year Old Customer

Harold Pomeranz, a former registered representative with Stifel, Nicolaus & Company, Inc (Stifel Nicolaus) submitted a Letter of Acceptance, Waiver and Consent (AWC) in which he was suspended and assessed a deferred fine of $5,000 by the Financial Industry Regulatory Authority (FINRA) for engaging in unsuitable short-term trading of Unit Investment Trusts (UITs) in the account of an 83 year old customer. According to FINRA, Harold Stephen Pomeranz, of Plainview, New York, recommended and effected approximately 21 UIT transactions in the account of his 83 year old customer. The UITs recommended by Mr. Pomeranz had 24 month maturity dates and significant upfront charges. The average holding period for the UITs recommended by Mr. Pomeranz was less than fourteen months. Further, on a number of occasions, FINRA found that Mr. Pomeranz recommended that his elderly customer use the proceeds from the short-term sale of one UIT to purchase another UIT with similar and/or identical investment objectives. These unsuitable recommendations and transactions caused his customer to incur unnecessary sales charges.

Former LPL Financial Broker Suspended for Unsuitable UIT Recommendations

Mark Tauzin, a former registered representative with LPL Financial LLC submitted a Letter of Acceptance, Waiver and Consent (AWC) in which he was suspended and assessed a deferred fine of $20,000 by the Financial Industry Regulatory Authority (FINRA) for engaging in unsuitable short-term trading of front-loaded Unit Investment Trusts (UITs) which resulted in sales charges to the customers of more than $316,000. According to FINRA, Mark Tauzin, of Lafayette, Louisiana, effected 215 UIT transactions in the accounts of 14 households that were sold within a 12 month time period. UITs are not designed to be used as trading investments, particularly not to be used for short-term trading, and typically carry significant upfront charges. As a result of Mr. Tauzin’s unsuitable UIT transactions, the customers incurred sales charges of $316,840.50 and Mr. Tauzin received $205,115.02 in commissions.