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AXA Broker Suspended for Unsuitable Mutual Fund Trading

James Davis Trent, of Lexington, South Carolina, was named a Respondent in a Financial Industry Regulatory Authority (FINRA) complaint for allegedly recommending and executing unsuitable mutual fund trades in the accounts of elderly retirees, causing the customers to suffer substantial losses. FINRA alleged that while employed with AXA Advisors, LLC, James Trent engaged in a pattern of recommending unsuitable short-term trading of Class A mutual fund shares to four customers. In the 14 transactions at issue, Mr. Trent is alleged by FINRA to have recommended the sale of Class A mutual fund shares within less than a year, on average just six months. This unsuitable trading activity resulted in the customers incurring over $6,000 in unnecessary sales charges and a commission, for Mr. Trent, of nearly $3,000.

Jun 23, 2017

MML Investors Services Broker Suspended by FINRA for Forging Customer’s Signature

Eric Ott, a broker formerly registered with MML Investors Services, LLC, submitted a Letter of Acceptance, Waiver, and Consent (AWC) in which he consented to, but did not admit to or deny, the Financial Industry Regulatory Authority’s (FINRA) findings that he forged a customer’s signature on life insurance applications without the customer’s knowledge or consent. According to FINRA, Eric Eugene Ott, of Union Kentucky, discussed the possibility of his customer applying for life insurance, but had not gotten her consent or approval to submit the applications. Mr. Ott, however, allegedly signed the customer’s name to the applications and paid the initial premiums without the customer’s knowledge. The customer became aware of the fraudulently obtained insurance policies only when she received correspondence from the issuing company, whereupon she called to complain.

Jun 22, 2017

AXA Advisors Broker Suspended by FINRA for Private Securities Transactions

Leon Dixon, a broker formerly registered with AXA Advisors, LLC, submitted a Letter of Acceptance, Waiver, and Consent (AWC) in which he consented to, but did not admit to or deny, the Financial Industry Regulatory Authority’s (FINRA) findings that he participated in private securities transactions in contravention of FINRA rules. FINRA found that Leon Edward Dixon, of Miami, Florida, invested in a private company that offered telecommunications and broadband services. Mr. Dixon allegedly solicited 15 firm customers to invest in the company, allegedly assisting the clients with sending their payment checks to the company. In total, the clients invested approximately $181,500 in the company. According to FINRA, Mr. Dixon received nearly $15,000 in commissions from the company for his participation in the transactions.

Jun 19, 2017

Former Vanguard Capital Broker Suspended for Unsuitable ETF Recommendations

John Amador Blakezuniga, a former registered representative with Vanguard Capital, submitted a Letter of Acceptance, Waiver, and Consent (AWC), in which he consented to, but did not admit to or deny, the Financial Industry Regulatory Authority’s (FINRA) findings that he made unsuitable ETF recommendations in 85 of his customers’ accounts. John Amador Blakezuniga, of Gurabo, Puerto Rico (a/k/a John Anthony Blake and John A Zuniga), allegedly recommended approximately 1,280 transactions in inverse and inverse-leveraged ETFs. Mr. Blakezuniga recommended that the non-traditional ETFs be held in his customers’ accounts for periods ranging from 30 days to several years, despite the warning in the prospectuses that “investment results for a single day only, not for longer periods.” The ETFs allegedly recommended by Blakezuniga were intended to be short-term trading vehicles and were not meant to be long-term investments.

Jun 16, 2017

Stifel Nicolaus Broker Suspended for Unsuitable UIT Recommendations to 83 Year Old Customer

Harold Pomeranz, a former registered representative with Stifel, Nicolaus & Company, Inc (Stifel Nicolaus) submitted a Letter of Acceptance, Waiver and Consent (AWC) in which he was suspended and assessed a deferred fine of $5,000 by the Financial Industry Regulatory Authority (FINRA) for engaging in unsuitable short-term trading of Unit Investment Trusts (UITs) in the account of an 83 year old customer. According to FINRA, Harold Stephen Pomeranz, of Plainview, New York, recommended and effected approximately 21 UIT transactions in the account of his 83 year old customer. The UITs recommended by Mr. Pomeranz had 24 month maturity dates and significant upfront charges. The average holding period for the UITs recommended by Mr. Pomeranz was less than fourteen months. Further, on a number of occasions, FINRA found that Mr. Pomeranz recommended that his elderly customer use the proceeds from the short-term sale of one UIT to purchase another UIT with similar and/or identical investment objectives. These unsuitable recommendations and transactions caused his customer to incur unnecessary sales charges.

Jun 15, 2017

Oak Ridge Financial Representative Suspended for Unauthorized Trades

Phillip Hinze, of Mendota Heights, Minnesota, submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) in which he was fined and suspended for placing unauthorized trades in a customer’s account in a one week time span without the customer’s authorization. FINRA investigators found that while registered with Oak Ridge Financial Services Group, Inc., Mr. Hinze placed an order to buy 100 shares of an exchange-traded fund (ETF) for $11,175. Seven days later, Mr. Hinze placed orders to buy 260 shares of two other ETFs and 210 shares of another ETF, for a total of $40,482. The customer had not authorized any of the transactions and quickly complained to the member firm, who cancelled the trades and terminated Mr. Hinze’s employment.

May 22, 2017

BancWest Broker Named in FINRA Complaint Alleging Unauthorized Trades

Corinne Renae Mittag, of Omaha, Nebraska, was named a Respondent in a Financial Industry Regulatory Authority (FINRA) complaint alleging that she executed numerous unauthorized trades in a customer’s account while employed with BancWest Investment Services, Inc. (BancWest). According to FINRA’s complaint, an imposter posing as a customer sent emails to Ms. Mittag requesting that she sell securities in order to fund a wire request to a third party. Ms. Mittag allegedly executed the sale of six corporate bond positions and one mutual fund position based upon the imposter’s email. FINRA alleges that at no time prior to submitting the trades did Ms. Mittag contact or attempt to contact the customer by phone, as was required. The complaint further alleges that Ms. Mittag falsely represented to BancWest that she had spoken with the customer by phone in order to process the trades.

May 19, 2017

FINRA Suspends Merrill Lynch Broker for Misrepresenting Mutual Funds

Jarred M. Lawson, of Jacksonville, 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 negligent misrepresentations with respect to the sale of Class A and C mutual funds. FINRA alleged that while registered with Merrill Lynch, Pierce, Fenner & Smith (Merrill Lynch), Mr. Lawson made negligent misrepresentations or omissions regarding the sale of Class A and C mutual funds during phone calls with numerous customers. According to FINRA, Mr. Lawson failed to discuss the share classes and the fees associated with them. Further, Mr. Lawson allegedly misrepresented the fees associated with a managed account.

May 17, 2017

PFS Investments Broker Suspended for Allowing an Unregistered Individual to Engage in Securities Activities

Jose Enrique Jimenez, a former registered principal with PFS Investments, Inc., submitted a Letter of Acceptance, Waiver and Consent (AWC) in which he was suspended and assessed a deferred fine of $10,000 by the Financial Industry Regulatory Authority (FINRA) for allowing his son, who was unregistered, to solicit prospective customers and recommend the purchase of mutual funds. According to FINRA, Jose Jimenez, of Inglewood, California, allowed his unregistered son to solicit prospective customers, make over 100 mutual fund presentations, and recommend the purchase of mutual funds which resulted in total sales of over $800,000 in approximately 35 accounts. Further, Mr. Jimenez allowed his son to assist customers with completion of the necessary documents and to enter client information into the firm’s computer system utilizing his personal credentials. FINRA found that Mr. Jimenez falsely stated on three firm compliance questionnaires that he did not allow an unregistered individual to engage in securities activities.

May 15, 2017

FINRA Suspends Former Cambridge Investment Research Broker for Unsuitable Mutual Fund Trades

Curtis Randle El, of Pittsburgh, Pennsylvania, submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) for allegedly recommending and executing unsuitable unit investment trust and mutual fund trades, including switches, in the accounts of elderly customers with conservative investment goals, causing the customers to suffer losses of approximately $33,185.00. FINRA alleged that Mr. Randle El recommended and effected unsuitable trades in the accounts of three elderly customers who had conservative investment objectives. Whereas Class A mutual funds and unit investment trusts (UITs) are designed to be longer-term investments, Mr. Randle El allegedly recommended that the customers sell them after an average of just 60 days. Furthermore, some of the transactions involved mutual fund switching – a practice where Class A mutual fund shares’ proceeds are used to purchase other Class A mutual fund shares. Mutual fund switching violates the antifraud provisions of federal securities laws when stockbrokers, in order to increase their compensation, induce investors to incur the fees associated with redeeming shares of one mutual fund and purchasing the shares of another fund and the benefit to the customer does not justify those costs.

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