Cetera Broker Suspended for Unsuitable Recommendation & Risky Trading Strategy
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.
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