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Peter Orlando, a Barrington, Rhode Island-based registered representative formerly employed with MetLife Securities, Inc., n/k/a MML Investors Services LLC, was named a Respondent in a Financial Industry Regulatory Authority (FINRA) complaint alleging that he failed to disclose that an elderly customer had designated him as account beneficiary of the customer’s will and bank account.

According to FINRA’s complaint, Peter Orlando used his position of trust with his client, an 81-year-old widow, to obtain durable power of attorney, health power of attorney, designation as the executor and primary beneficiary of the customer’s will, and beneficiary of the customer’s bank account.  Mr. Orlando failed to disclose the arrangements to his member firm, which prohibited its representatives from serving in a fiduciary capacity or being named as an account beneficiary for anyone other than family members.  Continue reading →

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Jodie Ann LaMarre, of Sarasota, Florida, submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) for allegedly recommending an unsuitable investment strategy to an elderly customer on a fixed income with conservative investment goals, causing the customer to suffer unnecessary tax liability of over $33,000.

While employed with the Sarasota, Florida branch of Robert W. Baird & Co., Ms. LaMarre allegedly recommended the consolidation of all her elderly customer’s assets into a single taxable account.  According to FINRA, Ms. LaMarre made this recommendation without regard for the fact that several of the customer’s assets were in tax-deferred accounts.  FINRA’s findings state that Ms. LaMarre was aware of and understood the negative tax consequences of her unsuitable recommendations, which resulted in unnecessary tax liability of more than $33,000 and a reduction of her customer’s 2016 monthly social security benefit. Continue reading →

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Jimmy Moscoso, a former registered representative with Lincoln Financial Advisors Corporation (Lincoln Financial) has been permanently barred by the Financial Industry Regulatory Authority (FINRA) based upon its findings that he converted funds of his elderly customer.

According to FINRA, Jimmy Oswald Moscoso, of Boca Raton, Florida, converted approximately $20,000 from his elderly customer, allegedly using the money for his own personal use instead.  FINRA found that an elderly customer agreed to invest $20,000 in a purported real estate investment by giving Mr. Moscoso a check for $20,000 made payable to a business owned by Mr. Moscoso.  Mr. Moscoso then endorsed the check and deposited it into an account controlled by him and used the money for his personal use.  Without admitting or denying FINRA’s findings, Mr. Moscoso was permanently barred from association with any FINRA member in any capacity. Continue reading →

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Mark Brian Degner, of Shady Cove, Oregon, submitted a Letter of Acceptance, Waiver, and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) for negligently making material misstatements regarding the sale of 20-year CDs to elderly customers.  According to FINRA, the customers suffered losses of approximately $75,000 as a result of investing in the misrepresented CDs.

FINRA found that, while employed by LPL Financial LLC, Mark Degner misrepresented  20-year interest rate-linked CDs to his customers by stating that the CDs were not subject to any survivor benefit limitations when, in fact, they were.  The survivor benefits of the CDs were subject to a limitation that restricted the amount of early redemptions among purchasers.  While the issuer’s disclosure statement disclosed this information, Mr. Degner failed to review this information and recommended that his customers purchase CDs totaling $685,000.  As a result of the survivor benefit limitation, the estates of two of the customers were not able to fully redeem their CDs and suffered losses of approximately $75,000.  Without admitting or denying FINRA’s findings, Mark Degner was fined $7,500 and suspended for 20 business days.  The suspension was in effect from March 5, 2018 through April 2, 2018. Continue reading →

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Richard Foster, a former registered representative with Cetera Investment Services LLC (Cetera) 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 making an unsuitable recommendation that his customer liquidate his IRA to be utilized in a high-risk options trading strategy.

According to FINRA, Richard Charles Foster, of Tulsa, Oklahoma, recommended his customer place the entirety of his IRA assets into a high-risk, unsuitable options trading strategy.  Mr. Foster allegedly received authorization from his member firm to operate an income fund by falsely representing that the fund would not involve any customers.  However, Mr. Foster recommended his customer liquidate his IRA, worth $169,000 to invest in the income fund account.  The income fund account lost significant value due to trading losses and the commission costs connected with the high-volume ETF option trading strategy.  FINRA stated that once Mr. Foster’s customer learned he had incurred an $81,000 tax penalty because of the early IRA liquidation, he asked Mr. Foster to return what was left of his funds to pay the penalty. Mr. Foster returned $52,000 to the customer – a significant loss of the initial investment of $169,000. Continue reading →

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Richard Shotz, a registered representative formerly employed with Morgan Stanley, submitted a Letter of Acceptance, Waiver and Consent (AWC) in which he was suspended for four months and fined $7,500 by the Financial Industry Regulatory Authority (FINRA) for engaging in unsuitable short-term trading of Unit Investment Trusts (UITs) in 486 customer accounts.

According to FINRA, Richard Alan Shotz, of Port Orange, Florida, recommended and engaged in unsuitable short-term trading of UITs.  The UITs recommended by Mr. Shotz had 24 month maturity dates and significant upfront charges.  Notwithstanding, Mr. Shotz continually recommended his customers sell their UITs less than a year after purchase (FINRA found an average holding period of only 143 days). Furthermore, on approximately 1200 occasions, FINRA found that Mr. Shotz recommended that his customers 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 customers to incur unnecessary sales charges.  Without admitting or denying FINRA’s findings, Mr. Shotz was fined $7,500 and suspended for four months.  The suspension is in effect from February 20, 2018 through June 19, 2018. Continue reading →

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Richard Seefried, of Spokane, Washington, submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) in which he was fined and suspended for unsuitable recommendations of convertible notes.

FINRA found that while employed with Spencer Edwards, Inc., Richard Seefried failed to adequately investigate representations made by the issuer of convertible promissory notes.  According to the FINRA AWC, Mr. Seefried failed to investigate discrepancies in materials provided by the issuer of the notes and failed to investigate the background of the officers of the issuer, who had prior litigation alleging securities fraud.  Mr. Seefried made unsuitable recommendations to two of his customers, sold $200,000 of the notes and received commission of $13,600. Continue reading →

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Costa Mesa, California-based Accelerated Capital Group (Accelerated Capital) was named in a Financial Industry Regulatory Authority (FINRA) complaint alleging that the firm failed to establish and maintain a proper supervisory system to detect unsuitable, excessive, or unauthorized trading in customers’ accounts.  FINRA’s complaint goes on to make numerous allegations regarding failures in the firm’s supervisory system.

According to the FINRA complaint, Accelerated Capital Group failed to properly monitor, through its supervisory system and written supervisory procedures (WSPs), mutual fund switches, exchanges, and sales for suitability, and failed to appropriately identify or respond to red flags of broker misconduct.    The complaint also alleges that the firm’s supervisory procedures failed to ensure that customers understood the differences in fees among mutual fund products.  Further, FINRA’s complaint alleges that due to the inadequate supervisory systems, a registered representative was able to churn his customers’ accounts, allegedly resulting in customers sustaining more than $900,000 in trading losses and improper sales loads. Continue reading →

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Michael Guilfoyle, a stockbroker previously registered with Legend Securities, Inc., submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) in which he was suspended for 10 months and assessed a deferred fine of $10,000.00.  Without admitting or denying FINRA’s allegations, Michael Nicholas Guilfoyle, of Old Bridge Township, New Jersey, consented to the entry of FINRA’s findings that he engaged in unsuitable excessive trading in customers’ accounts, resulting in cumulative losses to his customers of nearly $56,000.00.

According to FINRA, Mr. Guilfoyle exercised control over the accounts of two customers, one of whom was a senior citizen, due to the customers’ limited investment experience.  Mr. Guilfoyle’s trading strategy generated excessive commissions or markups/markdowns.  For example, during the 18 month time period in which his 73 year old customer’s account was open, Mr. Guilfoyle executed 77 transactions;  90% were solicited.  As a result of the excessive trading, the customer suffered losses of $27,821.22, while generating sales charges of over $35,000.00.  The other customer, FINRA found, suffered losses of more than $28,000.00 and sales charges for Mr. Guilfoyle of $26,150.00.  The suspension is in effect from December 18, 2017 through October 17, 2018. Continue reading →

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Charles Frieda, a former registered representative with Wells Fargo Clearing Services, LLC (f/k/a Wells Fargo Advisors, LLC), submitted a Letter of Acceptance, Waiver and Consent (AWC) in which he was barred by the Financial Industry Regulatory Authority (FINRA) for recommending an investment strategy which was over-concentrated in energy-sector securities and unsuitable for his clients.  FINRA found that Mr. Frieda’s unsuitable recommendations resulted in millions of dollars in losses to his clients.

FINRA found that Charles Henry Frieda (along with another Wells Fargo representative) recommended an over-concentration of energy-sector securities, some of which were speculative, to more than 50 customers.  Because of the speculative nature of the energy-sector securities, the volatility of the energy market, and the highly over-concentrated levels in the clients’ accounts, Mr. Frieda’s customers were exposed to significant losses.  According to FINRA, Mr. Frieda failed to properly consider his customers’ investment profiles, including their investment experience, risk tolerance, investment time horizon, net worth, and liquidity needs.  Even when the energy market began a downturn in 2015, Mr. Frieda continued to unsuitably recommend that his clients adhere to his investment strategy.  Due to his highly unsuitable recommendations, Mr. Frieda’s customers suffered millions of dollars in aggregate losses.  Without admitting FINRA’s findings, Charles H. Frieda, of Anaheim, California, was barred from association with any FINRA member in all capacities.

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