Richard Graham, a former registered representative with Huntington Investment Company of Lafayette, Indiana, submitted a letter of Acceptance, Waiver and Consent (AWC) in which he was suspended and assessed a deferred fine of $10,000 by the Financial Industry Regulatory Authority (FINRA) for Unit Investment Trust (UIT) recommendations which were unsuitable for his customers given their investment objectives.
According to FINRA, Richard Dale Graham, of Lebanon, Indiana, recommended that his customer, a 98-year old woman, invest in three UITs which made up approximately 42% of her net worth. Given the woman’s moderately conservative investment goals and age, the recommendations were found by FINRA to be unsuitable, and the UITs lost $29,493 in value.
FINRA also found that Mr. Graham recommended UIT investments to two other customers, a married couple who were 61 and 53 years old at the time and not native speakers of English and relied on their adult child to help translate during their meeting. Based on Mr. Graham’s recommendation, the couple invested what turned out to be 94% of their net worth in the UITs, resulting in an extreme over-concentration of a single fund investment that employed leverage and included non-investment grade securities. The UIT investment that Mr. Graham is alleged to have recommended lost $79,297.70 in value, nearly 22.7%.
As a result of the above-described unsuitable UIT recommendations, FINRA assessed Mr. Graham a deferred fine of $10,000, a suspension of two months, and ordered him to pay a deferred disgorgement of $3,541.04, plus interest.
Stockbrokers have been known to engage in many types of practices that may be in violation of industry and firm rules, practices, and procedures. In order to protect investors from stockbroker misconduct, FINRA rules require brokerage firms 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 brokerage firm’s own policies and procedures. If broker-dealers and their supervisors fail to establish and implement these protective measures, they may be liable to investors for damages flowing from the misconduct. Therefore, investors who have suffered losses stemming from unsuitable recommendations and/or other misconduct by their broker can bring forth claims to recover damages against broker-dealers, like Huntington Investment Company, which should consistently oversee its brokers’ activities in order to prevent the above-described prohibited conduct.
Have you suffered losses in your Huntington Investment Company account due to unsuitable recommendations made by your broker? 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 Huntington Investment Company stockbrokers who may have engaged in broker misconduct and caused investors’ losses.
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.