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Royal Securities Broker Barred by FINRA for Unsuitable ETF Recommendations

Allen Michael Green, a former registered representative with the Ypsilanti, Michigan branch of Royal Securities Company (Royal Securities) submitted a Letter of Acceptance, Waiver and Consent (AWC) in which he consented to, but did not admit to or deny, the Financial Industry Regulatory Authority’s (FINRA) findings that he made unsuitable non-traditional exchange traded funds (ETF) recommendations to a disabled customer who had limited financial resources, causing the customer massive investment losses.

According to FINRA, Allen Green believed that the world economy was on the brink of collapsing and recommended almost exclusively to invest in securities with precious metals, natural resources, commodities, and energy. Mr. Green allegedly recommended that his customer liquidate her existing variable annuity, which included a surrender charge of $59,583. As a result of following Mr. Green’s unsuitable recommendations, his client lost at least $193,165 which does not include the variable annuity surrender charge.

FINRA found that Mr. Green had no reasonable basis for recommending non-traditional ETFs to his customers because he failed to understand how the investments operated and the inherent risks they posed to retail customers. Due to the aforementioned misconduct, Allen Michael Green, of South Lyon, Michigan, was barred from association with any FINRA member in any capacity.

Stockbrokers and other financial industry professionals have been known to engage in many types of fraudulent and unlawful behavior, such as unsuitable investment recommendations, which violate industry rules and procedures. In order to protect investors from stockbroker misconduct, FINRA rules require brokerage firms to establish and implement a supervisory system. The implementation of the rules requires supervisors to monitor employees to ensure they comply with federal and state securities laws, securities industry rules and regulations, as well as the brokerage firm’s own policies and procedures. If broker-dealers do not establish and implement these protective measures, they may be held liable to investors for losses flowing from the broker misconduct. As a result, investors who have suffered losses stemming from a broker or registered representative’s unsuitable recommendations can bring forth claims to recover damages against brokerage firms like Royal Securities, which have a duty to supervise its employees in order to prevent broker misconduct.

Have you suffered losses in your Royal Securities investment account due to your broker’s unsuitable or misrepresented investment recommendations? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against stockbrokers for unsuitable investment recommendations and other types of prohibited and/or fraudulent stockbroker misconduct.

The most important of investors’ rights is the right to be informed! This Investors’ Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 35 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors’ rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.