May 2014 - Law Offices of Robert Wayne Pearce

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.

May 22, 2014

FINRA Fines and Suspends Mitchell Garrett for Distributing Commissions to Non-Members

Mitchell Garrett, a former Fort Lauderdale, Florida-based broker employed by New York, New York-based Lightspeed Trading, LLC, 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 paid all of the approximately $145,142 in commissions that he received from his firm to an unregistered day-trading firm, which in turn distributed the commissions to its owners, who were not registered with a FINRA member firm. FINRA’s findings stated that Mr. Garrett did not keep any of the commissions for himself and was not an owner of the day-trading firm. An uncertain portion of the commissions Mr. Garrett paid the day-trading firm’s owners represented rent from Mr. Garrett for his use of the day-trading firm’s office and equipment. Mr. Garret was assessed a deferred fine of $10,000, suspended from association with any FINRA member in any capacity for 30 business days, and required to cooperate with FINRA in its continuing investigation of this matter.

May 20, 2014

Investors Capital Corp. Censured and Fined for Inadequate Supervision of ETF Sales

Lynnfield, Massachusetts-based Investors Capital Corp. submitted a Letter of Acceptance, Waiver and Consent in which the firm consented to, but did not admit to or deny, the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that it failed to ensure delivery of exchange-traded fund (ETF) prospectuses to customers. The findings stated that the firm violated Section 5(b)(2) of the Securities Act of 1933 by failing to establish an adequate supervisory system, including written supervisory procedures (WSPs), concerning the sale of ETFs and the firm’s obligations to provide ETF prospectuses to customers. The firm did not have any procedures directly concerning the sale of ETFs or its obligations to provide ETF prospectuses to customers and permitted representatives to sell ETFs before completing any firm-mandated training. The firm was censured and fined $100,000

May 16, 2014

UBS Puerto Rico Investor Claims Stockbroker Lost Her Inheritance

The claimant is a 43 year old married housewife raising two children in San Juan, Puerto Rico. Several years ago, her father sold his business, gifting his daughter, $5 million dollars, which she deposited in her UBS Puerto Rico account. At that point in time, she had very little investment experience and a very small account. The claimant relied exclusively upon her UBS Puerto Rico broker for investment advice and management of the investments in her account.

May 6, 2014

FINRA Focused on Broker-Dealers’ Increased Equity Indexed Annuity Sales

InvestmentNews reports broker-dealers are leading the pack in the world of equity indexed annuities, with sales reaching more than $38 billion in 2013, up over 13% from a little over $34 billion in 2012. Most of that growth is attributable to sales activity at large regional firms. At LPL Financial, the largest independent broker-dealer with 13,600 affiliated reps and advisers, sales of fixed annuities and equity indexed annuities have surged in the first quarter of 2014. Sales of variable annuities at the firm, meanwhile, decreased approximately 2% in the first quarter, down to about $198 million.

May 2, 2014

William Coolidge Permanently Barred by FINRA for Unsuitable Recommendations to Elderly Investors

William Bradford Coolidge, a former Registered Representative with Memphis, Tennessee-based Stifel, Nicolaus & Company, Inc. (Stifel Nicolaus) 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 effected approximately 233 trades in the accounts of three elderly customers with neither the customers’ written authorization nor the acceptance by Stifel Nicolaus of the accounts as being discretionary. According to FINRA, William Coolidge, of Cordova, Tennessee, allegedly implemented a trading strategy in an 86 year old customer’s individual retirement account (IRA) wherein he switched from mutual funds and Unit Investment Trusts (UITs) to other mutual funds or UITs after holding them for a time period. Mr. Coolidge’s alleged unsuitable recommendations, especially considering the customer’s age, risk profile and income, caused the elderly investor over $43,000 in losses and paid over $52,000 in commissions.

May 1, 2014

Richard Jameison Permanently Barred by FINRA for Conversion of Clients Funds

Richard David Jameison Jr., a former Registered Principal with New York-based Blackrock Investments, LLC (Blackrock) has been permanently barred by the Financial Industry Regulatory Authority (FINRA). According to FINRA, Richard Jameison, of Devon, Pennsylvania, converted $150,000 from an individual who was not a customer of Blackrock. FINRAs findings stated that Mr. Jameison had the individual, an acquaintance, wire $150,000 into a securities account which was jointly owned between Mr. Jameison and his wife. The money was supposed to be an investment in a business enterprise which Mr. Jameison alleged was along with a small group of investors, including himself. Mr. Jameison, however, never invested the money and instead allegedly converted the funds for his personal use. The acquaintance allegedly asked Richard Jameison repeatedly for the return of his investment plus earnings. Mr. Jameison gave the acquaintance two checks drawn from his jointly held personal accounts, alleging that the monies covered his original investment plus the return on the investment. FINRA found that the checks were dishonored due to insufficient funds. As a result of his unlawful conduct, Richard Jameison was terminated by Blackrock Investments and the acquaintance and his wife have filed a lawsuit against him.