Unsuitable Investment Recommendation Lawyer - Law Offices of Robert Wayne Pearce

Jul 31, 2018

Ameriprise Broker Suspended for Unsuitable Investment Recommendations

Brian Hussey, a former registered representative with Ameriprise Financial Services, Inc. (Ameriprise) submitted a Letter of Acceptance, Waiver and Consent (AWC) in which he was suspended for seven months by the Financial Industry Regulatory Authority (FINRA) for making unsuitable recommendations that his customer sell 100% of her IRA’s mutual fund positions and invest the proceeds in penny stocks, which resulted in market losses of $58,572 to his customer. According to FINRA, Brian John Hussey, Jr., of Zephyrhills, Florida, recommended that his customer sell 100% of the mutual fund positions in her IRA accounts and invest the money in two penny stocks related to the marijuana business. Because this unsuitable recommendation was in contravention of his member firm’s policies, Mr. Hussey mismarked 16 solicited trades as unsolicited to avoid the firm’s detection. Within five months of his unsuitable recommendation to sell his customer’s mutual fund positions, his customer was 100% concentrated in the marijuana-related penny stocks. The customer complained to Ameriprise, alleging market losses in her accounts of $58,572, and the firm settled the complaint. Mr. Hussey, however, is obligated to pay back the firm.

Apr 24, 2017

LPL Financial Broker Suspended for Unsuitable Recommendations to Elderly Customers

Adam Fritzsche, a stockbroker formerly registered with LPL Financial Corporation (LPL Financial), submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) in which he was suspended for one year for allegedly making unsuitable recommendations of a speculative, illiquid investment to three elderly retirees. According to FINRA, Adam Stuart Fritzsche, of Canterbury, Connecticut, recommended that three of his customers purchase an investment in a business development company, which was a speculative, illiquid investment that was suitable only as a long-term investment for those with no need for liquidity. His customers were ages 81, 89, and 61 at the time of Mr. Fritzsche’s recommendations.

Apr 7, 2017

Sterne Agee Broker Suspended for Outside Business Activity and Unsuitable Recommendation

John Corsi, a registered representative with Sterne Agee Financial Services, Inc. (Sterne Agee) submitted a Letter of Acceptance, Waiver and Consent (AWC) in which he was suspended and assessed a deferred fine of $20,000 by the Financial Industry Regulatory Authority (FINRA) for engaging in outside business activity and making unsuitable promissory note recommendations to his customers. According to FINRA, John Paul Corsi, of Parma, Ohio, failed to fully disclose his involvement in an outside business activity to his member firm, failed to disclose his role in fundraising and the promissory notes issued by his outside business activity that he was allegedly recommending to firm customers for compensation. Mr. Corsi was found by FINRA to have received a fee of 5% for these promissory note recommendations, of which his customers invested a total of $1,790,041. Of those customers, three were allegedly unsuitably invested in 20% or more of their stated net worth. These customers’ investment objectives were allegedly much more conservative then the promissory notes’ significant risk profile.

May 28, 2015

Wells Fargo Broker Fined and Suspended by FINRA for Unsuitable Investment Recommendations

According to the Financial Industry Regulatory Authority (FINRA), Randall Layne Girton, of Orland Park Illinois, recommended that one of his Well Fargo customers purchase mutual fund shares and then, shortly thereafter, sold them to reinvest in a Wells Fargo investment advisory program, known as “Fund Source.” FINRA investigated and concluded that Mr. Girton’s recommendation that the customer sell her mutual fund share to invest in a Wells Fargo Proprietary Investment Advisory Program was an unsuitable investment recommendation, especially when he recommended several months after that the customer sell the Fund Source program and repurchase the mutual funds. FINRA Rule 2111(a) requires that registered representatives have a reasonable basis to believe that the recommended securities transactions are suitable in light of a particular customer’s investment objectives and financial condition. FINRA found that Mr. Girton’s recommendation that the Wells Fargo customer liquidate the Class A mutual fund shares that were part of a long term buy and hold investment strategy within months was unsuitable. According to FINRA, Mr. Girton had no basis to believe that the expected return on the Fund Source program would exceed the return on the mutual fund investment he previously recommended.