Paul Reid Richardson, of Temple Terrace, Florida, submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Department of Enforcement of the Financial Industry Regulatory Authority (FINRA) in which he was suspended for 60 days for failing to supervise wire-transfer activity in customer accounts.
Paul Richardson, a former registered principal with the Tampa, Florida branch of Cabot Lodge Securities LLC (Cabot), consented to, without admitting or denying, the sanctions and FINRA’s findings that he approved third-party wire transfers totaling nearly $89,000 from two customer accounts, which were later found to have been made by an imposter. By authorizing the wire-transfers, Mr. Richardson allegedly failed to properly review the distribution requests for funds. According to FINRA, Mr. Richardson relied on the representations of a firm broker as opposed to verbally confirming the wire instructions with the customers.
FINRA also found that Mr. Richardson failed to detect other red flags when he approved the wire transfers. Specifically, Mr. Richardson allegedly failed to identify that at least one of the IRA Distribution Request forms appeared to be a reused copy of an earlier IRA Distribution form with the date and dollar amount altered. Consequently, Paul Richardson was suspended by FINRA for 60 days. The suspension is in effect from October 5, 2015 through December 3, 2015.
Registered principals, stockbrokers and other financial industry professionals have been known to engage in many types of fraudulent and unlawful behavior, including wire transfer fraud, 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 and 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 broker misconduct. As a result, investors who have suffered losses stemming from a broker or registered representative’s misconduct or a registered principal’s failure to supervise, can bring forth claims to recover damages against brokerage firms like Cabot Lodge Securities, which have a duty to supervise its employees in order to prevent the above-described conduct.
Have you suffered losses in your Cabot Lodge Securities investment account due to your broker’s misconduct and/or the firm’s failure to supervise its employees? 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 email@example.com for answers to any of your questions about this blog post and/or any related matter.