William Stafford Thurmond of El Paso, Texas submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) in which he has been fined and suspended for allegedly making unsuitable recommendations and unauthorized transactions in violation of NASD Rule 2310 and FINRA Rules 2111, 4511, and 2010.
From October 1997 until his termination in November 2016, William Stafford Thurmond was registered with EDI Financial as a general securities representative and general securities principal. According to FINRA’s findings, Thurmond recommended unsuitable transactions and executed various unauthorized trades in a customer’s account totaling approximately $328,000. The findings stated that Mr. Thurmond placed eighteen trades without obtaining authorization or approval from the customer or his power of attorney. FINRA also stated that the customer’s desire was to achieve higher returns than he would receive in a savings account, but wanted limited risk to his principal. Instead, the account held the leveraged and inverse leveraged ETFs for an average of over 150 days, which exceeded the recommendations in the ETFs’ prospectuses and FINRA’s NTM 09-31. In addition, Thurmond received $42,724 in commissions from the unsuitable recommendations and caused the customer to generate losses of $212,731.00.
NASD Rule 2310(a), which is the predecessor to FINRA Rule 2111, in relevant part, states: “In recommending to a customer the purchase of any security, a member must have reasonable grounds for believing that the recommendation is suitable for such customer upon the basis of the facts, if any, disclosed by such customer as to his or her other security holdings, financial situation, and needs.” A violation of NASD Rule 2310 or FINRA Rule 2111 is also a violation of FINRA Rule 2010.
FINRA Rule 4511 requires, inter alia, that “Members shall make and preserve books and records as required under the FINRA rules, the Exchange Act and the applicable Exchange Act rules.” An individual may violate FINRA Rule 4511 by causing his or her member firm to fail to maintain accurate books and records. A violation of FINRA Rule 4511 is also a violation of FINRA Rule 2010.
Without admitting or denying FINRA’s findings, William Stafford Thurmond has been fined $25,000, ordered to pay $42,724 in deferred disgorgement of commissions and suspended from association with any FINRA member in all capacities for 15 months. The suspension is in effect from April 15, 2019, through July 14, 2020.
Stockbrokers have been known to engage in many practices that may violate 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 supervisory system. The implementation of these industry rules requires supervisors to monitor their employees to ensure compliance with federal and state securities laws, securities industry rules and regulations, and the brokerage firm’s own policies and procedures. If broker-dealers and/or their supervisors fail to establish and implement these protective measures, they may be liable to investors for damages which flow from the broker’s misconduct. Therefore, investors who have suffered losses stemming from unsuitable recommendations, unauthorized transactions and/or other misconduct by their broker can file claims to recover damages against broker-dealers, like EDI Financial, which should consistently oversee its brokers’ activities in order to prevent the above-described misconduct.
Have you suffered losses in your EDI Financial account due to unsuitable recommendations and/or unauthorized transactions by your broker? Was William Stafford Thurmond your stockbroker? 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 EDI Financial 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 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 visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at firstname.lastname@example.org for answers to any of your questions about this blog post and/or any related matter.