Unsuitable Mutual Fund Switches Lawyer - Law Offices of Robert Wayne Pearce

FINRA Suspends LPL Financial Broker for Unsuitable Mutual Fund Trading

Steve Dale Heath, of Newport News, Virginia, submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) for allegedly executing unsuitable mutual fund trades, including switches, in the account of an elderly customer with conservative investment goals, causing the customer to suffer losses of approximately $7,207. FINRA alleged that Steve Heath recommended and effected short-term mutual fund trades in the account of an elderly customer. Mutual funds are intended as longer-term investments. However, Mr. Heath allegedly recommended selling after only 249 days on average. Further, some of the trades involved mutual fund switches, which were allegedly unsuitable for his customer in light of the customer’s conservative investment objectives. Mutual fund “switching” is simply the process of transferring an investment from one mutual fund to another, sometimes for good reasons and other times to defraud clients. Some brokers attempt to effect numerous switches in client accounts in order to generate commissions.

Dec 6, 2016

Cambridge Investment Research Broker Suspended For Unsuitable Mutual Fund Switches

Robert Lyons, of Augusta Georgia, submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Department of Enforcement of the Financial Industry Regulatory Authority (FINRA) for allegedly executing unsuitable mutual fund switches in the accounts of three customers. FINRA alleged that between January 2011 and December 2013, Robert Lyons recommended and effected fourteen unsuitable mutual fund switches in the accounts of three customers, resulting in unnecessary fees for his customers. Mutual fund “switching” is simply the process of transferring an investment from one mutual fund to another, sometimes for good reasons and other times to defraud clients. Some brokers attempt to effect numerous switches in client accounts in order to generate commissions. In the case of Mr. Lyons, FINRA found that the former Cambridge Investment Research representative caused unnecessary losses to his clients and additional commissions for himself as a result of the mutual fund “switches” he recommended. FINRA found that Mr. Lyons recommended his customers purchase Class A and Class T shares for the switches, which were only advantageous if the customers held them on a long-term basis, usually several years or more. In this case, the switches recommended and effected by Mr. Lyons were held for less than one year and all of the customers involved incurred added and unnecessary commission charges.