A complaint against Demitrios Hallas of New York was filed by the Department of Enforcement of the Financial Industry Regulatory Authority (FINRA) for alleged unsuitable investment recommendations. Hallas was associated with Chase Investment Services Corp. in 2007 as a General Securities Principal during the relevant period and has not been associated with a FINRA member since May 2014. According to a Form U-5 filed by Chase Investment Services, Hallas was terminated in 2012 for “job performance, including customer complaints alleging unauthorized trades and failure to disclose fee.”
In August and September 2011, Hallas allegedly recommended two customers (Client 1 & 2) to liquidate their investments and invest the proceeds in mutual funds. FINRA alleges that Hallas had no reasonable basis for the recommendation of these investment switches which were not suitable for the customers and led to them incurring unnecessary fees and charges.
In July 2008, Client 1 invested $75,000 in a fixed annuity offered by Genworth Life Insurance Company of New York. The annuity had a minimum guaranteed interest rate of 3 percent for the next three years. Client 1 at the time was 41 years old and was employed as a waitress and was not subject to risk of principal loss from the annuity. Client 1 additionally executed a Fixed Annuity Insurance Authorization Form hat indicated her investment time horizon was 19 years. Any withdraws made prior to the prior would subject the client to penalties and charges.
In September 2011, Hallas recommended to client 1 that she surrender her investment in the annuity and invest her proceeds in a bond fund offered by JP Morgan. The bond fund had no guaranteed rate of return and unlike the annuity, exposed the client to risk of principal loss. FINRA alleged that Hallas knew the bond exposed the client to more risk than the annuity and that he never ascertained whether Client 1 would incur surrender charges as a result of liquidating the annuity. Hallas allegedly never properly advised the client and the investment was executing amounting to $2,560.87 in commission for Hallas. Additionally, FINRA alleged that Hallas did similar actions to another client who liquidated $174,600 from her First Trust UIT that provided him $4,888.80 in commissions.
FINRA alleged that Hallas had no reason to believe both investments would be better for the clients and that he failed to ascertain the basic costs associated with the investment switches. Hallas settled without admitting or denying the allegations and was suspended from association with an FINRA member in any capacity for a period of 30 days, ordered to pay a $5,000 fine, and restitutions with interest to the Chase Investment Services customers for violating NASD Rule 2310 and FINRA Rule 2010.
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 Chase Investment Services Corp. 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 Chase Investment Services Corp. 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 Chase Investment Services Corp., which should consistently oversee its employees in order to prevent stockbroker misconduct.
Have you suffered losses in your Chase Investment Services Corp. 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 40 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 email@example.com, 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.