Articles Tagged with Unsuitable UIT Recommendation

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