Christian Harkness of La Crosse, Wisconsin submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) for allegedly violating his broker-dealer conduct rules. Mr. Harkness entered the securities industry in 1998 as a General Securities Representative (GSR). Mr. Harkness became associated with UBS Financial Services Inc. (UBS) in 2007 and later in 2009 to Stifel, Nicolaus & Co. (Stifel) as a GSR.
FINRA found that Mr. Harkness violated NASD Rule 2370 and FINRA Rules 3240 and 2010 by borrowing money from a firm client on two occasions as well as failing to disclose outside business activities. FINRA alleged that Mr. Harkness did not receive written permission from his broker-dealer to participate in either of the activities and thereby violated FINRA conduct rules.
In July 2009, Mr. Harkness purchased a piece of land from a UBS customer. To purchase the land, Mr. Harkness executed a promissory note as evidence of a loan. Later in 2012, Mr. Harkness made a similar agreement with the same UBS customer who paid for addition farm expansion expenses. The promissory note that indicated the amount due for Mr. Harkness was also a loan. This is a violation of FINRA rules as Mr. Harkness never received written permission to accept loans from clients.
Additionally, FINRA found that Mr. Harkness failed to disclose outside business activates through his role in the farm. FINRA alleged that Mr. Harness was actively involved in the management and customers of the farm and did not disclose this to his member firm. Furthermore, Mr. Harkness failed to disclose to his FINRA member firm that he also acted as the President for a Minnesota limited liability company.
Without admitting or denying the findings, Mr. Harness agreed to the terms of the FINRA AWC and was suspended from association with any FINRA member for nine months and fined $15,000.
Stockbrokers have been known to engage in many types of practices which violate industry and firm rules, practices, and procedures. In order to protect customers from stockbroker misconduct, FINRA rules require broker-dealers such as UBS to establish and implement a reasonable supervisory system. The implementation of the rules require supervisors to monitor employees to ensure they comply with federal and state securities laws, securities industry rules and regulations, and the firm, such as UBS’s own policies and procedures. If broker dealers and/or their supervisors do not establish and implement these protective measures, they may be liable to investors for damages which flow from the misconduct. As a result, investors who have suffered losses because of their stockbroker’s unlawful or prohibited conduct can file a claim to recover damages against broker dealers like UBS which should consistently oversee its employees in order to prevent stockbroker misconduct.
Have you suffered losses in your UBS investment account due to your stockbroker’s misconduct? 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 recommendations, misrepresentations, and/or other unauthorized and prohibited conduct.
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 post a comment, call (800) 732-2889, send Mr. Pearce an email at firstname.lastname@example.org, and/or visit our website at www.secatty.com for answers to any of your questions about this blog post and/or any related matter.