Daniel Grieco of Middletown, New Jersey submitted a Letter of Acceptance, Waiver and Consent (AWC), without admitting or denying the findings, to the Department of Enforcement of the Financial Industry Regulatory Authority (FINRA) for allegedly recommending trades to customers without having reasonable grounds to believe the investments were suitable. Grieco entered the securities industry in 1983 and has been registered as a General Securities Representative at FINRA member First Allied Securities, Inc. since August 2010.
FINRA found that between July 21, 2008 and July 19, 2013, Grieco recommended and caused to be executed transactions of various leveraged and inverse-leveraged ETFs in 15 customer accounts. The ETFs were designed to achieve their designed to achieve their objectives over the course of one day. However, the ETF were held for much longer periods, in some cases for more than five years. FINRA alleged that Grieco, in extending the holding period of the ETFs, failed to appreciate the nature of the ETFs at the time of his recommendations, to wit, that they were not designed to achieve their objectives for extended holding periods. Therefore, FINRE concluded that Grieco did not have reasonable grounds to believe his recommendations were suitable and thereby violated NASD Rules 2310 and 2010. Continue Reading