Articles Posted in Broker Misconduct

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Jimmy Moscoso, a former registered representative with Lincoln Financial Advisors Corporation (Lincoln Financial) has been permanently barred by the Financial Industry Regulatory Authority (FINRA) based upon its findings that he converted funds of his elderly customer.

According to FINRA, Jimmy Oswald Moscoso, of Boca Raton, Florida, converted approximately $20,000 from his elderly customer, allegedly using the money for his own personal use instead.  FINRA found that an elderly customer agreed to invest $20,000 in a purported real estate investment by giving Mr. Moscoso a check for $20,000 made payable to a business owned by Mr. Moscoso.  Mr. Moscoso then endorsed the check and deposited it into an account controlled by him and used the money for his personal use.  Without admitting or denying FINRA’s findings, Mr. Moscoso was permanently barred from association with any FINRA member in any capacity. Continue reading →

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Mark Brian Degner, of Shady Cove, Oregon, submitted a Letter of Acceptance, Waiver, and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) for negligently making material misstatements regarding the sale of 20-year CDs to elderly customers.  According to FINRA, the customers suffered losses of approximately $75,000 as a result of investing in the misrepresented CDs.

FINRA found that, while employed by LPL Financial LLC, Mark Degner misrepresented  20-year interest rate-linked CDs to his customers by stating that the CDs were not subject to any survivor benefit limitations when, in fact, they were.  The survivor benefits of the CDs were subject to a limitation that restricted the amount of early redemptions among purchasers.  While the issuer’s disclosure statement disclosed this information, Mr. Degner failed to review this information and recommended that his customers purchase CDs totaling $685,000.  As a result of the survivor benefit limitation, the estates of two of the customers were not able to fully redeem their CDs and suffered losses of approximately $75,000.  Without admitting or denying FINRA’s findings, Mark Degner was fined $7,500 and suspended for 20 business days.  The suspension was in effect from March 5, 2018 through April 2, 2018. Continue reading →

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Richard Foster, a former registered representative with Cetera Investment Services LLC (Cetera) 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 making an unsuitable recommendation that his customer liquidate his IRA to be utilized in a high-risk options trading strategy.

According to FINRA, Richard Charles Foster, of Tulsa, Oklahoma, recommended his customer place the entirety of his IRA assets into a high-risk, unsuitable options trading strategy.  Mr. Foster allegedly received authorization from his member firm to operate an income fund by falsely representing that the fund would not involve any customers.  However, Mr. Foster recommended his customer liquidate his IRA, worth $169,000 to invest in the income fund account.  The income fund account lost significant value due to trading losses and the commission costs connected with the high-volume ETF option trading strategy.  FINRA stated that once Mr. Foster’s customer learned he had incurred an $81,000 tax penalty because of the early IRA liquidation, he asked Mr. Foster to return what was left of his funds to pay the penalty. Mr. Foster returned $52,000 to the customer – a significant loss of the initial investment of $169,000. Continue reading →

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Richard Shotz, a registered representative formerly employed with Morgan Stanley, submitted a Letter of Acceptance, Waiver and Consent (AWC) in which he was suspended for four months and fined $7,500 by the Financial Industry Regulatory Authority (FINRA) for engaging in unsuitable short-term trading of Unit Investment Trusts (UITs) in 486 customer accounts.

According to FINRA, Richard Alan Shotz, of Port Orange, Florida, recommended and engaged in unsuitable short-term trading of UITs.  The UITs recommended by Mr. Shotz had 24 month maturity dates and significant upfront charges.  Notwithstanding, Mr. Shotz continually recommended his customers sell their UITs less than a year after purchase (FINRA found an average holding period of only 143 days). Furthermore, on approximately 1200 occasions, FINRA found that Mr. Shotz recommended that his customers use the proceeds from the short-term sale of one UIT to purchase another UIT with similar and/or identical investment objectives.  These unsuitable recommendations and transactions caused his customers to incur unnecessary sales charges.  Without admitting or denying FINRA’s findings, Mr. Shotz was fined $7,500 and suspended for four months.  The suspension is in effect from February 20, 2018 through June 19, 2018. Continue reading →

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Richard Seefried, of Spokane, Washington, submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) in which he was fined and suspended for unsuitable recommendations of convertible notes.

FINRA found that while employed with Spencer Edwards, Inc., Richard Seefried failed to adequately investigate representations made by the issuer of convertible promissory notes.  According to the FINRA AWC, Mr. Seefried failed to investigate discrepancies in materials provided by the issuer of the notes and failed to investigate the background of the officers of the issuer, who had prior litigation alleging securities fraud.  Mr. Seefried made unsuitable recommendations to two of his customers, sold $200,000 of the notes and received commission of $13,600. Continue reading →

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Michael Guilfoyle, a stockbroker previously registered with Legend Securities, Inc., submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) in which he was suspended for 10 months and assessed a deferred fine of $10,000.00.  Without admitting or denying FINRA’s allegations, Michael Nicholas Guilfoyle, of Old Bridge Township, New Jersey, consented to the entry of FINRA’s findings that he engaged in unsuitable excessive trading in customers’ accounts, resulting in cumulative losses to his customers of nearly $56,000.00.

According to FINRA, Mr. Guilfoyle exercised control over the accounts of two customers, one of whom was a senior citizen, due to the customers’ limited investment experience.  Mr. Guilfoyle’s trading strategy generated excessive commissions or markups/markdowns.  For example, during the 18 month time period in which his 73 year old customer’s account was open, Mr. Guilfoyle executed 77 transactions;  90% were solicited.  As a result of the excessive trading, the customer suffered losses of $27,821.22, while generating sales charges of over $35,000.00.  The other customer, FINRA found, suffered losses of more than $28,000.00 and sales charges for Mr. Guilfoyle of $26,150.00.  The suspension is in effect from December 18, 2017 through October 17, 2018. Continue reading →

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Charles Frieda, a former registered representative with Wells Fargo Clearing Services, LLC (f/k/a Wells Fargo Advisors, LLC), submitted a Letter of Acceptance, Waiver and Consent (AWC) in which he was barred by the Financial Industry Regulatory Authority (FINRA) for recommending an investment strategy which was over-concentrated in energy-sector securities and unsuitable for his clients.  FINRA found that Mr. Frieda’s unsuitable recommendations resulted in millions of dollars in losses to his clients.

FINRA found that Charles Henry Frieda (along with another Wells Fargo representative) recommended an over-concentration of energy-sector securities, some of which were speculative, to more than 50 customers.  Because of the speculative nature of the energy-sector securities, the volatility of the energy market, and the highly over-concentrated levels in the clients’ accounts, Mr. Frieda’s customers were exposed to significant losses.  According to FINRA, Mr. Frieda failed to properly consider his customers’ investment profiles, including their investment experience, risk tolerance, investment time horizon, net worth, and liquidity needs.  Even when the energy market began a downturn in 2015, Mr. Frieda continued to unsuitably recommend that his clients adhere to his investment strategy.  Due to his highly unsuitable recommendations, Mr. Frieda’s customers suffered millions of dollars in aggregate losses.  Without admitting FINRA’s findings, Charles H. Frieda, of Anaheim, California, was barred from association with any FINRA member in all capacities.

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Jaime Rodriguez, a former registered representative with HSBC Securities (USA) Inc., has been permanently barred by the Financial Industry Regulatory Authority (FINRA) amid findings that he converted funds of his elderly, legally blind customer.

According to FINRA, Jaime R. Rodriguez, of Yonkers, New York, converted approximately $200,000 from his elderly, legally blind customer, using the money to purchase two apartments in his own name, unbeknownst to his customer.  In the first apartment purchase, FINRA found that Mr. Rodriguez converted approximately $70,000 of his customer’s funds.  In the second apartment purchase, Mr. Rodriguez allegedly converted $130,000 of his customer’s funds.  In both purchases, the customer had no idea that Mr. Rodriguez was the sole owner of the apartments due to the fact that the elderly customer could not see or read the documents.  In the case of the second apartment, FINRA found that Mr. Rodriguez was renting out the apartment and collecting and keeping the rent.  Without admitting or denying FINRA’s findings, Mr. Rodriguez was permanently barred from association with any FINRA member in any capacity. Continue reading →

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Jay Dee Jordan, a former registered representative with WFG Investments, Inc. submitted a Letter of Acceptance, Waiver and Consent (AWC) in which he was barred by the Financial Industry Regulatory Authority (FINRA) for recommending and executing hundreds of unsuitable non-traditional exchange traded fund (ETF) purchases in his customers’ accounts.  FINRA found that Mr. Jordan’s unsuitable recommendations and ETF purchases resulted in his clients’ accounts sustaining realized and unrealized losses of more than $8.4 million.

FINRA found that Jay Dee Jordan, of Oklahoma City, Oklahoma, recommended that his clients purchase over $22 million in non-traditional ETFs. Of the 84 accounts in which Mr. Jordan recommended the  non-traditional ETFs, 79 of these accounts held ETF positions for longer than thirty days, and on numerous occasions, the ETF positions were held for years.  According to FINRA, Mr. Jordan routinely failed to sell these complex products on the same day he purchased them and did not have a reasonable basis to believe that his long-term buy-and-hold recommendations were suitable for his customers.  Continue reading →

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Mathew M. Serth, of Stone Ridge, Virginia, submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) in which he was fined and suspended for allegedly placing unauthorized trades in customers’ accounts without their knowledge or consent.

FINRA investigators found that while registered with Morgan Stanley, Mr. Serth entered trade orders in four accounts.  The net costs of the transactions ranged from $15,000 to $86,000.  However, FINRA stated that none of these customers granted Mr. Serth discretionary trading authorization to trade in their accounts.  Upon discovering the unauthorized trades, Mr. Serth’s member firm cancelled the trades and reimbursed a customer for margin interest incurred as a result of the unauthorized trades.  Without admitting or denying FINRA’s findings, Mr. Serth was assessed a deferred fine of $5,000 and suspended from association with any FINRA member in any capacity for three months.  The suspension is in effect from August 7, 2017 through November 6, 2017. Continue reading →