Robert Frank Spiegel of Staten Island, New York submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) in which he was fined and suspended for allegedly engaging in excessive and unsuitable trading in violation of FINRA Rules 2111 and 2010.
From October 2014 through November 2018, Robert Frank Spiegel was registered with First Standard Financial as a General Securities Representative. According to the FINRA findings, Robert Frank Spiegel allegedly engaged in quantitatively unsuitable trading in the account of a 70-year-old customer. The FINRA findings stated that the customer followed Mr. Spiegel’s recommendations, giving him de facto authority over the account and while doing so resulted in a high turnover rate of 34 and an annualized cost-to-equity ratio of 113%. In addition to the FINRA findings, the customer paid $18,047 in commissions and fees to Mr. Spiegel and incurred losses of $77,334.
Turnover rate represents the number of times that a portfolio of securities is exchanged for another portfolio of securities. The cost-to-equity ratio measures the amount an account has to appreciate just to cover commissions and other expenses. In other words, it is the break-even point where a customer may begin to see a return. A turnover rate of six or a cost-to-equity ratio above 20 percent generally indicates that excessive trading has occurred.
FINRA Rule 2111(a) Provides in pertinent part that a member or an associated person must have a reasonable basis to believe that a recommended transaction or investment strategy involving a security or securities is suitable for the customer, based on the information obtained through the reasonable diligence of the member or associated person to ascertain the customer’s investment profile.”
Without admitting or denying FINRA’s findings, Robert Frank Spiegel was assessed a deferred fine of $5,000, suspended from association with any FINRA member in all capacities for four months and ordered to pay $18,047, plus interest, in deferred restitution to a customer. The suspension is in effect from February 3, 2020, through June 2, 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 excessive, unsuitable trading and/or other misconduct by their broker can file claims to recover damages against broker-dealers, like First Standard Financial, which should consistently oversee its brokers’ activities in order to prevent the above-described misconduct.
Have you suffered losses in your First Standard Financial account due to excessive and/or unsuitable trading by your broker? Was Robert Frank Spiegel 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 First Standard 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 email@example.com for answers to any of your questions about this blog post and/or any related matter.