Brent Burgesser of Chandler, Arizona submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Department of Enforcement of the Financial Industry Regulatory Authority (FINRA) for allegedly executing unsuitable mutual fund switches in the accounts of three customers. Burgesser became registered in the securities industry in May 2000 as a General Securities Representative (GSR).From October 2008, through July 2012, Mr. Burgesses was an associated member with Wells Fargo Advisors, LLC.
FINRA alleged that between January 2009 and May 2012, Mr. Burgesser effected 83 unsuitable mutual fund switches in the accounts of several customers, resulting in more than $63,700 in customer losses. Mutual fund “switching” is simply the process of transferring an investment from one fund to another, sometimes for good reason and other times to defraud clients. Some brokers attempt to effect numerous switches in client accounts in order to generate commissions. In the case of Mr. Burgesser, FINRA found that the former Wells Fargo representative generated approximately $109,500 in commissions for himself as a result of mutual fund “switching.”
FINRA alleged that Mr. Burgesser executed these mutual fund switches without having reasonable grounds for believing that such transactions were suitable for his customers in view of the nature, frequency, and size of the recommended transactions and in light of each customer’s financial situation, investment objectives, risk tolerance and circumstances. FINRA found that this pattern of unsuitable mutual fund switches violated NASD Rule 2310(a) and FINRA Rule 2010. Without admitting or denying the FINRA allegations, Mr. Burgesser agreed to the sanctions and was suspended from association with any FINRA member for a period of 60 days and ordered to pay a $5,000 fine
Supervision within a brokerage firm can take many different forms, and the failure to enforce policies and procedures, can create grounds for a claim. Among other areas, management should have appropriate supervisory processes in place for the regular review of investor accounts, quality checks to see that the right products are being recommended to investors, and audits to ensure continual compliance with federal and state securities laws, securities industry rules and regulations, as well as the brokerage firm’s own policies and procedures.
Have you suffered losses in your Wells Fargo account? Did you suffer from a broker making unsuitable trades in your investment accounts? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.
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.