Longwood, Florida-based registered representative Michael Anthony Barina, employed by Altamonte Springs, Florida-based Merrimac Corporate Securities, Inc., submitted a Letter of Acceptance, Waiver and Consent in which he consented to, but did not admit to or deny, the Financial Industry Regulatory Authority’s (FINRA) sanctions and findings that he recommended an investment in a private placement investment pool without sufficiently understanding the entity’s investment strategy or its parameters. FINRAs findings stated that the entity’s investment strategy included investing up to 25% of its assets in a single security and engaging in options trading. According to FINRA, Mr. Barina allegedly “lacked a reasonable basis to believe that the entity was a suitable investment for the customers,” thereby making an unsuitable recommendation.
The sale of unsuitable investments is actionable under FINRA Rule 2111, the “Suitability Rule,” which requires that a firm or associated person “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.” Brokerage firms and their employees have the responsibility to make suitable recommendations to investors in stating investment objectives and financial condition, tax status, and other relevant factors.
Additionally, FINRAs finding also stated that Mr. Barina accepted a personal check from a registered representative for $124,000 with instructions to keep $18,000 as a personal debt payment and to deposit the remaining balance into the account of the private placement pool. Mr. Barina allegedly deposited the entire check into his personal bank account. He subsequently transferred the appropriate funds into the entity’s investment account, thereby commingling the representative’s funds with his own, which is a breach of fiduciary duty.
As a result of FINRA’s findings, Mr. Barina was fined $12,500 and suspended from association with any FINRA member in any capacity for three months. The suspension is in effect from October 21, 2013, through January 20, 20134.
Have you suffered losses in a private placement account? Have you suffered losses in your Merrimac Corporate Securities or any other brokerage account due to unsuitable recommendations by your broker? Was Michael Barina 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 Merrimac Corporate Securities stockbrokers who may have engaged in 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 , 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.