Jason Figueroa of Coral Springs, Florida submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Department of Enforcement of the Financial Industry Regulatory Authority (FINRA) for allegedly engaging in unsuitable transactions in leveraged and inverse leveraged exchange traded funds (ETF’s) that he did not understand. Mr. Figueroa first became associated with FINRA through The GMS Group, LLC (GMS) in 2006. In March 2015, Mr. Figueroa was terminated by GMS due to a series of client complaints and settlements.
In June 2009, FINRA released a regulatory notice pertaining to ETF’s. It stated that it was the responsibility of the firm and its representatives to understand the unique features of ETFs and their typical holding period (one day). In 2011, Mr. Figueroa revised his investment strategy for 4 client accounts who were inexperienced in investing and had moderate risk tolerance.
Mr. Figueroa recommended nontraditional ETF transactions for his four accounts that were previously invested in bonds. FINRA alleged that Mr. Figueroa didn’t conduct proper due diligence and didn’t fully understand the characteristics of the ETF’s. The ETF’s were designed to be most effective when bought and sold within the same day. On at least 118 occasions, FINRA found that Mr. Figueroa held nontraditional ETF’s for more than one day. Additionally, between 2011 and 2013, Mr. Figueroa participated in discretionary trades in fourteen clients’ accounts without their written authorization.
Without admitting or denying the FINRA findings, Mr. Figueroa agreed to the FINRA sanctions and was barred from association with any FINRA member in any capacity.
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 The GMS Group 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 The GMS Group 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 The GMS Group, which should consistently oversee its employees in order to prevent stockbroker misconduct.
Have you suffered losses in your The GMS Group 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.