Stockbrokers In The News - Law Offices of Robert Wayne Pearce

May 28, 2015

Wells Fargo Broker Fined and Suspended by FINRA for Unsuitable Investment Recommendations

According to the Financial Industry Regulatory Authority (FINRA), Randall Layne Girton, of Orland Park Illinois, recommended that one of his Well Fargo customers purchase mutual fund shares and then, shortly thereafter, sold them to reinvest in a Wells Fargo investment advisory program, known as “Fund Source.” FINRA investigated and concluded that Mr. Girton’s recommendation that the customer sell her mutual fund share to invest in a Wells Fargo Proprietary Investment Advisory Program was an unsuitable investment recommendation, especially when he recommended several months after that the customer sell the Fund Source program and repurchase the mutual funds. FINRA Rule 2111(a) requires that registered representatives have a reasonable basis to believe that the recommended securities transactions are suitable in light of a particular customer’s investment objectives and financial condition. FINRA found that Mr. Girton’s recommendation that the Wells Fargo customer liquidate the Class A mutual fund shares that were part of a long term buy and hold investment strategy within months was unsuitable. According to FINRA, Mr. Girton had no basis to believe that the expected return on the Fund Source program would exceed the return on the mutual fund investment he previously recommended.

May 27, 2015

LPL Financial Stockbroker Barred by FINRA for Taking Prohibited Customer Loans

Raymond Daniel Schmidt, a former registered representative with the Oceanside, California branch of LPL Financial LLC (LPL Financial), consented to, but did not admit to or deny, the sanction and the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that he borrowed over $2.25 million from customers, failed to disclose his outside business activity, and falsely reported, in several firm questionnaires, his involvement in this misconduct. Without admitting or denying FINRA’s findings, Raymond Schmidt, of Oceanside, California, consented to the sanctions and to the findings that he borrowed more than $2.25 million from seven LPL Financial customers, in violation of FINRA Rule 3240, which prohibits registered representatives from borrowing or lending money to customers unless permitted under the firm’s rules. Mr. Schmidt allegedly borrowed the money from the LPL customers for the purpose of constructing a vacation property in Hawaii. Further, FINRA found that Raymond Schmidt failed to notify his member firm of his involvement in this outside business activity.

May 22, 2015

Raymond James Stockbroker Suspended by FINRA for Taking Customer Loans

Raymond Sardina, a registered representative with the Coral Gables, Florida branch of Raymond James & Associates, Inc. (Raymond James) been suspended by the Financial Industry Regulatory Authority (FINRA) for borrowing a customer’s money in violation of firm rules. Without admitting or denying FINRA’s findings, Raymond Sardina consented to the sanctions and to the findings that he borrowed $10,000 from a Raymond James customer, in violation of FINRA Rule 3240, which prohibits registered representatives from borrowing or lending money to customers unless permitted under the firm’s rules. In this case, Mr. Sardina was required to notify his firm of the loan and obtain firm approval, both of which he allegedly failed to do, according to FINRA.

May 18, 2015

Former Essex Securities Broker Fined and Suspended for Unsuitable Mutual Fund Switches

Jennifer Joice Trowbridge, a former broker employed by the Boynton Beach, Florida branch of Essex Securities LLC, submitted a Letter of Acceptance, Waiver and Consent in which she consented to, but did not admit to or deny, the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that she made unsuitable mutual fund switch recommendations which cost her customers nearly $60,000 in unnecessary commissions. According to FINRA, Jennifer Trowbridge, of Boca Raton, Florida, recommended, on at least 29 occasions and in 7 customer accounts, a series of mutual fund switches which were unsuitable for those customers. Ms. Trowbridge allegedly recommended that the customers purchase Class A mutual funds, for which they paid commissions and sales charges. FINRA alleged she subsequently recommended that they sell the mutual funds within just 1 month to 13 months, with the average being just 6 months that the customers held the funds prior to selling. FINRA found that Ms. Trowbridge used the funds from the sales of the mutual funds to purchase other mutual funds, for which the customers paid additional commissions and fees. FINRA’s findings state that Ms. Trowbridge’s customers paid approximately $60,000 in unnecessary commissions and fees on her recommended switches between mutual funds.

May 15, 2015

Former Fifth Third Securities Broker Permanently Barred For Misappropriating Investor Funds

Former Fifth Third Securities, Inc. (Fifth Third Securities) broker Steven Dunkelberg submitted a Letter of Acceptance, Waiver and Consent in which he consented to, but did not admit to or deny, the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that he misappropriated $4,970.08 of a customer’s bank account without the customer’s knowledge or consent. According to FINRA, Steven James Dunkelberg Jr., of Grand Rapids, Michigan, forged his customer’s name on five different occasions on bank account withdrawal slips. Mr. Dunkelberg allegedly made the withdrawals from his customer’s Fifth Third Securities account without the customer’s knowledge or consent. FINRA found that Mr. Dunkelberg misappropriated $4,970.08 from the customer’s account. Consequently, Steven Dunkelberg was barred from association with any FINRA member in any capacity.

May 4, 2015

Liberty Partners Stockbroker Barred by FINRA for the Fraud of an Elderly Client

Ronald Paul Rafaloff, a former registered representative with the Bakersfield, California branch of Liberty Partners Financial Specialists, LLC (Liberty Partners) submitted a Letter of Acceptance, Waiver and Consent in which he consented to, but did not admit to or deny, the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that he converted $168,000 of an elderly customer’s investment funds for his personal use and benefit. According to FINRA, Ronald Rafaloff’s only client, a 74 year old retiree, invested $405,000 of her retirement money into three speculative business entities. The business entities, for which Mr. Rafaloff claimed to provide consulting services, were actually founded and controlled by Mr. Rafaloff. In order to persuade his elderly client to invest, Mr. Rafaloff allegedly promised annual returns of 30-40% and a repayment of her principal in three years. He also allegedly provided the elderly investor with written guarantees against losses, agreeing to personally make payments to the investor if the business entities should default. FINRA found that none of the companies held sufficient funds to cover the return of principal or the high rates of returns promised by Mr. Rafaloff.

May 1, 2015

Former Morgan Stanley Broker Fined and Suspended for Discretionary Trade Violations

Debra Kaye Lyman, a former registered representative with the Holladay, Utah branch of Morgan Stanley, submitted a letter of acceptance, waiver, and consent in which she consented to, but did not admit to or deny, the Financial Industry Regulatory Authority’s (FINRA) findings that she entered discretionary trades in several customers’ accounts without the necessary prior written customer authorization. FINRA found that Debra Lyman, of West Jordan, Utah, neglected to obtain the necessary written customer authorization or the acceptance by her firm of the accounts as discretionary when she effected discretionary trades in at least six customers’ accounts. According to FINRA, Debra Lyman had been previously reprimanded and suspended by Morgan Stanley for engaging in similar broker misconduct. Further, Ms. Lyman allegedly misrepresented on a Firm Employee Sales Questionnaire that she had not transacted business on a discretionary basis for any accounts.

Apr 29, 2015

Michael Korson Barred by FINRA for Failure to Disclose Outside Business Activities

Michael Willard Korson, a former registered representative with PFS Investments, Inc. (PFS Investments) and HBW Securities, LLC (HBW Securities) has been barred from association with any Financial Industry Regulatory Authority (FINRA) member in any capacity for allegedly failing to report his outside business activities and other industry violations. Without admitting or denying FINRA’s findings, Michael Korson consented to the sanctions and to the findings that he neglected to timely and accurately notify his member firm of his outside business activities. Mr. Korson also falsely stated when his involvement with the outside business first began. According to FINRA, Mr. Korson participated in private securities transactions, involving his outside business, with sales of convertible debentures to firm customers. He also participated in the sale of preferred stock to a non-customer without providing the necessary prior written notice to his firm.

Apr 27, 2015

Former NYLIFE Securities Broker Barred by FINRA for Converting Funds of an Elderly Investor

William Robert Kinyon, a former registered representative with the Castleford, Idaho branch of NYLIFE Securities LLC (NYLIFE Securities) submitted a Letter of Acceptance, Waiver and Consent in which he consented to, but did not admit to or deny, the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that he converted funds from an elderly customer’s account for personal use. According to FINRA, William Kinyon’s elderly brokerage customer told him that she wanted to deposit $3,000 into one of her variable annuity accounts. Mr. Kinyon, however, deposited the check into his personal checking account and allegedly used the funds to make multiple personal purchases at stores such as Walmart and Costco.

Apr 24, 2015

Former Edward Jones Broker Fined by FINRA for Unsuitable Investment Recommendations

Dalas L. Gundersen, a former Registered Representative with the Willows, California branch of Edward Jones, submitted a letter of acceptance, waiver, and consent in which he consented to, but did not admit to or deny, the Financial Industry Regulatory Authority’s (FINRA) sanction and findings that he made unsuitable investment recommendations to his customers in light of their financial goals. FINRA’s findings alleged that Dalas Gundersen, of Arbuckle California, recommended that a married couple invest in an intermediate municipal bond mutual fund, even though the investor couple had inquired about investing in oil and gas master limited partnerships. According to FINRA, the couple acted upon Mr. Gundersen’s recommendation and purchased nearly $1.26 million in mutual fund, which represented 80% of their net worth.