Quincy DeEarl Caldwell, of Katy Texas, submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) for allegedly recommending and executing unsuitable mutual fund trades, including switches, in customer accounts, causing the customers to suffer losses of approximately $57,820.
FINRA alleged that Quincy Caldwell recommended and effected unsuitable mutual fund trades in six customer accounts, including 22 mutual fund switches. Whereas Class A mutual funds are designed to be longer-term investments, Mr. Caldwell allegedly made 119 unsuitable short-term mutual fund trades, an average holding time of just 110 days. Due to Mr. Caldwell’s unsuitable recommendations and short-term mutual fund trades, his six customers incurred $57,820 in Class A mutual fund sales charges.
FINRA Rule 2111 states that a registered representative must have a “reasonable basis to believe that a recommended transaction or investment strategy involving a security or securities is suitable for the customer.” A violation of this rule also constitutes a violation of FINRA Rule 2010. By virtue of the foregoing, FINRA found that Mr. Caldwell allegedly violated FINRA Rules 2111 and 2010. Without admitting or denying the allegations, Quincy Caldwell consented to the sanctions, was suspended from association with any FINRA member for a period of three months, and assessed a deferred fine of $5,000. The suspension is in effect from March 16, 2020 through June 15, 2020.
Stockbrokers have been known to engage in many practices that may be in violation of 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 require 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 and/or mutual fund switches by their broker can bring forth claims to recover damages against broker-dealers, like PlanMember Securities, which should consistently oversee its brokers’ activities in order to prevent the above-described misconduct.
Have you suffered losses in your PlanMember Securities account? Did you suffer financial losses from a broker making unsuitable mutual fund trades or switches in your investment accounts? Was Quincy Caldwell 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 PlanMember Securities stockbrokers who may have engaged in stockbroker 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 email@example.com for answers to any of your questions about this blog post and/or any related matter.