Even with the frequency of enforcement actions slowing during the summer months, both FINRA and the Texas State Securities Board have brought or settled several significant enforcement actions against broker dealers, summarized below.
Recent FINRA Enforcement Actions:
- FINRA Fines Prudential Annuities Distributors, Inc. $950,000
On July 19, 2016, FINRA announced it had fined Prudential Annuitites Distributors, Inc. for its failure to prevent and detect a scheme that resulted in the theft of over $1.3 million from an elderly customer’s annuity account. The theft of the funds by a former LPL sales assistant through the transfer of money from the annuity account to his wife’s bank account went undetected, despite numerous, glaring “red flags.” The sales assistant, Travis Wetzel, has since been barred from the industry by FINRA. Prudential and LPL reimbursed the customer.
- FINRA Charges Broker with Churning Elderly Widow’s Account.
On August 1, 2016 FINRA announced it had filed a complaint against broker Hank Mark Werner, of Northport New York. Werner is accused of committing securities fraud, after churning the account of a 77 year old blind widow, as well as engaging in excessive and unsuitable trading in the widow’s account. According to the allegations of the complaint, Werner charged his client over $243,000 in commissions during a three-year span, while leaving her with net losses of over $184,000. From October 2012 – December 2015, Werner placed 700+ trades in his client’s account, with little to no hope of profitability.
Recent Texas State Securities Board Action:
- In the Matter of The Dealer Registration of The Investment Center, Inc. Order No. ic16-CAF-13
On July 29, 2016, the Texas State Securities Board entered into a consent order with New Jersey based broker-dealer “The Investment Center,” which called for the broker-dealer to pay a $50,000 fine. According to the Consent Order, the broker-dealer failed to properly supervise a former agent or recognize certain “red flags” in accounts. For example, from January 2010-March 2014, the agent recommended unsuitable securities and over-concentrated client accounts in low-priced securities issued by energy companies. According to the Consent Order, the broker-dealer failed to “conduct a reasonable investigation in the Agent’s activity in response to . . . red flags associated with the Agent’s recommendation to clients.”
If you have concerns regarding your investment and account, or believe you may have been the victim of broker misconduct, please contact Robert Linkin at Duggins Wren Mann & Romero to discuss your rights. Rob represents victims of investment fraud in Texas and across the country. Rob can be reached at (512) 744-9300 or at firstname.lastname@example.org.