Brian Douglas Engstrom of Tampa, Florida 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 making unsuitable recommendations in violation of NASD Rule 2310 and FINRA Rules 2111 and 2010.
In 2002, Brian Douglas Engstrom joined Oppenheimer & Co. as a General Securities Representative and a General Securities Sales Supervisor. According to the FINRA findings, Engstrom allegedly engaged in an unsuitable pattern of short-term trading of early rollovers of Unit Investment Trusts (UITs). The findings stated that Engstrom made recommendations to his customers to roll over UITs prior to their maturity date in order to purchase a subsequent series on 1,000 separate occasions. The findings also stated that each new UIT had similar investment objectives and strategies as the prior series which resulted in each customer incurring unnecessary sales charges. Engstrom’s customers received reimbursement of these excess sales charges from his member firm in connection with FINRA’s separate settlement with it.
A UIT is a SEC-registered investment company that offers investors shares or “units” in a fixed portfolio of securities via a one-time public offering. A UIT terminates on a specified maturity date, often after 15 or 24 months, at which point the underlying securities are sold and the resulting proceeds are paid to the investors. UITs impose a variety of upfront sales charges and a registered representative who recommended the sale of a customer’s UIT before its maturity date and used the sale proceeds to purchase a new UIT would cause the customer to incur greater sales charges than if the customer had held the UIT until maturity.
Without admitting or denying FINRA’s findings, Brian Douglas Engstrom was assessed a deferred fine of $5,000 and suspended from association with any FINRA member in all capacities for three months. The suspension was in effect from April 20, 2020, through July 19, 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 Oppenheimer & Co., which should consistently oversee its brokers’ activities in order to prevent the above-described misconduct.
Have you suffered losses in your Oppenheimer & Co. account due to unsuitable recommendations by your broker? Was Brian Douglas Engstrom 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 Oppenheimer & Co. 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.