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Kirsten Flynn Hawkins of Staunton, Virginia, submitted an Acceptance, Waiver and Consent (AWC) to, settle violations of Financial Industry Regulatory Authority (FINRA) Rule 8210 for failing to provide the documents and information requested in connection with a FINRA investigation.

Ms. Hawkins voluntarily resigned from the securities industry with FINRA on November 13, 2014, and her registration with FINRA was terminated on December 10, 2014. As of now, Ms. Hawkins is not associated with a FINRA member firm, but still remains subject to FINRA’s jurisdiction pursuant. Continue reading →

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According to the Financial Industry Regulatory Authority (FINRA), Randall Layne Girton, of Orland Park Illinois, recommended that one of his Well Fargo customers purchase mutual fund shares and then, shortly thereafter, sold them to reinvest in a Wells Fargo investment advisory program, known as “Fund Source.” FINRA investigated and concluded that Mr. Girton’s recommendation that the customer sell her mutual fund share to invest in a Wells Fargo Proprietary Investment Advisory Program was an unsuitable investment recommendation, especially when he recommended several months after that the customer sell the Fund Source program and repurchase the mutual funds.

FINRA Rule 2111(a) requires that registered representatives have a reasonable basis to believe that the recommended securities transactions are suitable in light of a particular customer’s investment objectives and financial condition. FINRA found that Mr. Girton’s recommendation that the Wells Fargo customer liquidate the Class A mutual fund shares that were part of a long term buy and hold investment strategy within months was unsuitable. According to FINRA, Mr. Girton had no basis to believe that the expected return on the Fund Source program would exceed the return on the mutual fund investment he previously recommended. Continue reading →

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Raymond Daniel Schmidt, a former registered representative with the Oceanside, California branch of LPL Financial LLC (LPL Financial), consented to, but did not admit to or deny, the sanction and the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that he borrowed over $2.25 million from customers, failed to disclose his outside business activity, and falsely reported, in several firm questionnaires, his involvement in this misconduct.

Without admitting or denying FINRA’s findings, Raymond Schmidt, of Oceanside, California, consented to the sanctions and to the findings that he borrowed more than $2.25 million from seven LPL Financial customers, in violation of FINRA Rule 3240, which prohibits registered representatives from borrowing or lending money to customers unless permitted under the firm’s rules. Mr. Schmidt allegedly borrowed the money from the LPL customers for the purpose of constructing a vacation property in Hawaii. Further, FINRA found that Raymond Schmidt failed to notify his member firm of his involvement in this outside business activity. Continue reading →

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UBS Wealth Management and UBS Puerto Rico have been ordered by the Financial Industry Regulatory Authority (FINRA) to pay $1 million in damages to a 66 year old investor. According to the arbitration panel, UBS brokers encouraged the investor to keep and hold 100% of his investment portfolio in risky Puerto Rico closed end bond funds despite the fact that the investment was extremely over-concentrated and completely unsuitable for him.

According to the arbitration award, this conservative, frugal investor lost $737,000 of his nearly $1 million portfolio. When the investor approached UBS with his concerns about the decline in the value of his investment portfolio the UBS branch manager allegedly stated that “even a skinny cow could give milk.” The FINRA arbitration award went on to note that UBS provided the investor with brochures and monthly statements in English, despite the fact that he spoke very little English and had requested the documents be sent in Spanish. Unfortunately, this investor did not know that UBS brokers were allegedly under pressure to sell these risky closed-end bond funds and to encourage investors to hold the bonds even when their value collapsed in the fall of 2013. Continue reading →

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Raymond Sardina, a registered representative with the Coral Gables, Florida branch of Raymond James & Associates, Inc. (Raymond James) been suspended by the Financial Industry Regulatory Authority (FINRA) for borrowing a customer’s money in violation of firm rules.

Without admitting or denying FINRA’s findings, Raymond Sardina consented to the sanctions and to the findings that he borrowed $10,000 from a Raymond James customer, in violation of FINRA Rule 3240, which prohibits registered representatives from borrowing or lending money to customers unless permitted under the firm’s rules. In this case, Mr. Sardina was required to notify his firm of the loan and obtain firm approval, both of which he allegedly failed to do, according to FINRA. Continue reading →

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Jennifer Joice Trowbridge, a former broker employed by the Boynton Beach, Florida branch of Essex Securities LLC, submitted a Letter of Acceptance, Waiver and Consent in which she consented to, but did not admit to or deny, the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that she made unsuitable mutual fund switch recommendations which cost her customers nearly $60,000 in unnecessary commissions.

According to FINRA, Jennifer Trowbridge, of Boca Raton, Florida, recommended, on at least 29 occasions and in 7 customer accounts, a series of mutual fund switches which were unsuitable for those customers. Ms. Trowbridge allegedly recommended that the customers purchase Class A mutual funds, for which they paid commissions and sales charges. FINRA alleged she subsequently recommended that they sell the mutual funds within just 1 month to 13 months, with the average being just 6 months that the customers held the funds prior to selling. FINRA found that Ms. Trowbridge used the funds from the sales of the mutual funds to purchase other mutual funds, for which the customers paid additional commissions and fees. FINRA’s findings state that Ms. Trowbridge’s customers paid approximately $60,000 in unnecessary commissions and fees on her recommended switches between mutual funds. Continue reading →

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Former Fifth Third Securities, Inc. (Fifth Third Securities) broker Steven Dunkelberg 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 misappropriated $4,970.08 of a customer’s bank account without the customer’s knowledge or consent.

According to FINRA, Steven James Dunkelberg Jr., of Grand Rapids, Michigan, forged his customer’s name on five different occasions on bank account withdrawal slips. Mr. Dunkelberg allegedly made the withdrawals from his customer’s Fifth Third Securities account without the customer’s knowledge or consent. FINRA found that Mr. Dunkelberg misappropriated $4,970.08 from the customer’s account. Consequently, Steven Dunkelberg was barred from association with any FINRA member in any capacity. Continue reading →

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JPMorgan Chase & Co (JPMorgan) is under investigation by the Securities and Exchange Commission (SEC) about a potential conflict of interest and breach of fiduciary duty with respect to its sales of mutual funds and other proprietary products.

According to InvestmentNews, JPMorgan received subpoenas and inquiries from the SEC and other government authorities about the firm’s sale and recommendations of mutual funds and other proprietary investment products in its wealth management business. At question is the alleged breach of fiduciary duty, which requires that financial advisors put their customers’ best interests ahead of their own. Continue reading →

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Gregory James Bolduc, a former registered representative with the Goleta, California branch of UnionBanc Investment Services, LLC , submitted a letter of acceptance, waiver, and consent in which he consented to, but did not admit to or deny, the Financial Industry Regulatory Authority’s (FINRA) findings that he falsified the signatures of six UnionBanc customers’ mutual fund disclosure forms.

According to FINRA, Gregory Bolduc, of Santa Barbara, California, met with six UnionBanc customers who were interested in purchasing mutual funds. Although the firm required that the customers sign separate disclosure forms for each fund in their portfolio and that the signature be authentic, Mr. Bolduc allegedly submitted 30 disclosure forms that had photocopied signatures. FINRA found that Mr. Bolduc had each customer sign one disclosure form for all of the mutual funds in their portfolios, then submitted the forms to the firm, purporting that the signatures were authentic. Continue reading →

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LPL Financial LLC (LPL Financial) was fined $11.7 million by the Financial Industry Regulatory Authority (FINRA) for failing to maintain a proper supervisory system with respect to the sales of complex investment products, such as exchange-traded funds (ETFs), variable annuities, mutual funds, and non-traded real estate investment trusts.

Without admitting or denying the findings, LPL Financial consented to FINRA’s sanctions and findings that if failed to enforce its supervisory procedures for the sales of non-traditional ETFs, such as leveraged, inverse, and inverse-leveraged ETFs. Specifically, FINRA found that LPL Financial failed to enforce allocation limits with respect to customers’ investment objectives in its sales of non-traditional ETFs. LPL also failed to ensure that some of its registered representatives were adequately trained to sell the ETFs. Continue reading →