William Bradford Coolidge, a former Registered Representative with Memphis, Tennessee-based Stifel, Nicolaus & Company, Inc. (Stifel Nicolaus) submitted a Letter of Acceptance, Waiver and Consent in which he consented to, but did not admit to or deny, the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that he effected approximately 233 trades in the accounts of three elderly customers with neither the customers’ written authorization nor the acceptance by Stifel Nicolaus of the accounts as being discretionary. According to FINRA, William Coolidge, of Cordova, Tennessee, allegedly implemented a trading strategy in an 86 year old customer’s individual retirement account (IRA) wherein he switched from mutual funds and Unit Investment Trusts (UITs) to other mutual funds or UITs after holding them for a time period. Mr. Coolidge’s alleged unsuitable recommendations, especially considering the customer’s age, risk profile and income, caused the elderly investor over $43,000 in losses and paid over $52,000 in commissions.
In another instance, FINRA found that William Coolidge used the same switching and holding trade strategy with the IRA of an 83 year old customer, again causing the elderly investor and his wife to incur losses of over $41,000 and nearly $30,000 in paid commissions because of his unsuitable recommendations with respect to the elderly couple’s age, risk profile, and investment objectives. As a result of his unlawful conduct, William Coolidge was permanently barred from association with any FINRA member in any capacity.
Every brokerage firm has the responsibility of “knowing the customer” and making a customer specific “suitability” determination for every investment recommendation. The “Suitability Rule,” FINRA Rule 2111, requires that a firm or associated person “have a reasonable basis to believe that a recommended transaction or investment strategy involving a security or securities is suitable for the customer, based on the information obtained through the reasonable diligence of the member or associated person to ascertain the customer’s investment profile.” Brokerage firms and their associated persons have the responsibility to make suitable recommendations with respect to individuals’ investment objectives, financial condition, age and other relevant factors.
Stockbrokers, registered representatives, and other financial industry professionals have been known to engage in many types of fraudulent and unlawful behavior which violate industry rules and procedures. In order to protect investors from such misconduct, FINRA rules require broker-dealers to establish and implement a reasonable supervisory system. These rules requires supervisors to monitor employees to ensure they comply with federal and state securities laws, securities industry rules and regulations, as well as the brokerage firm’s own policies and procedures. If broker-dealers do not establish and implement these protective measures, they may be liable to account holders for losses flowing from the misconduct. As a result, account holders who have suffered losses stemming from a stockbroker or financial advisor’s misconduct, including making unsuitable recommendations, can bring forth claims to recover damages against broker-dealers like Stifel Nicolaus, which have a duty to supervise its employees in order to prevent these types of stockbroker misconduct.
Have you suffered losses in your Stifel Nicolaus investment account due to your registered representative or stockbroker’s unsuitable recommendation? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against financial professionals for unsuitable recommendations, mismanagement of accounts and/or other unauthorized and illegal conduct.
The most important of investors’ rights is the right to be informed! This Investors’ Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over , Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities, and investment law issues. The lawyers at our law firm are devoted to protecting investors’ rights throughout the United States and internationally! Please post a comment, call (800) 732-2889, send Mr. Pearce an email at email@example.com, and/or visit our website at www.secatty.com for answers to any of your questions about this blog post and/or any related matter.