Timothy Robert Millis of Lake Orion, Michigan submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) in which he has been suspended for allegedly making unsuitable recommendations in violation of FINRA Rules 2111 and 2010.
In 2002, Millis joined NYLIFE Securities as General Securities Representative and Insurance Agent. According to FINRA, Millis recommended 66 unsuitable short-term Class A mutual fund share transactions in ten customers’ accounts. FINRA stated that the ten customers were charged approximately $174,725 in upfront sales charges and five customers accrued losses totaling approximately $33,391. FINRA also found that Millis recommended to another customer an unsuitable switch from a variable annuity to Class A mutual fund shares which resulted in a surrender charge of $14,866 and upfront sales charges of $15,340. In addition, FINRA stated that Millis did not have a reasonable basis to believe these recommendations were suitable therefore violated the customer-specific suitability obligation.
FINRA Rule 2111 requires that, before recommending a security to any customer, a registered representative must have a reasonable basis to believe that a recommended transaction is suitable for the customer. One of the obligations associated with this Rule is “reasonable-basis” suitability. Rule 2111.05(a) states that the reasonable-basis obligation requires “a member or associated person to have a reasonable basis to believe, based on reasonable diligence, that the recommendation is suitable for at least some investors.” Another obligation associated with Rule 2111 is “customer-specific” suitability. Rule 2111.05(b) states that the customer-specific obligation requires that “a member or associated person have a reasonable basis to believe that the recommendation is suitable for a particular customer based on that customer’s investment profile.” A customer’s investment profile includes, among other things, the customer’s age, other investments, financial situation and needs, tax status, investment objectives, investment experience, investment time horizon, liquidity needs, and risk tolerance.
Without admitting or denying FINRA’s findings, Timothy Robert Millis was has been suspended from association with any FINRA member in all capacities for three months and ordered to pay deferred disgorgement of a portion of commissions received to FINRA in the amount of $7,500. The suspension is in effect from November 18, 2020, through February 17, 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, and/or other misconduct by their broker can file claims to recover damages against broker-dealers, like NYLIFE Securities, which should consistently oversee its brokers’ activities in order to prevent the above-described misconduct.
Have you suffered losses in your NYLIFE Securities account due to unsuitable recommendations by your broker? Was Timothy Robert Millis 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 NYLIFE Securities 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.