Los Angeles Broker Consents to FINRA Bar to Resolve Allegations of Churning and Excessive and Unsuitable Trading in Customer AccountsMonday, December 10, 2018
On November 15, 2018, former registered representative Sean Waters submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) Department of Enforcement, agreeing to a bar from associating with FINRA member firms for allegedly engaging in churning and excessive and unsuitable trading in customer accounts.
According to his FINRA BrokerCheck report, Waters was associated with Financial West Group in Los Angeles, California from December 2010 to April 2017. He then became associated with Newbridge Securities Corporation in Boca Raton, Florida from April 2017 to February 2018.
FINRA alleged in the AWC that between January 2013 and March 2016, Waters engaged in churning and excessive and unsuitable trading in two accounts held by an elderly customer. This misconduct was identified in a sales practice evaluation focusing on Water’s trading activity. According to the AWC, Waters exercised de facto control over and made all trading decisions in this customer’s individual and IRA account, including which and how many securities to buy and sell and when to do so. Between January 2013 and March 2016, Waters executed 523 trades in the customer’s individual account and an additional 540 transactions in her IRA account from October 2013 to March 2016. Waters received $115,000 in commissions for these transactions, while the customer lost $88,000 out of the $150,000 she initially transferred to Financial West.
Based on the foregoing, Waters violated Section 10(b) of the Exchange Act and FINRA Rules 2020, 2111, and 2010. Without admitting or denying the allegations made against him by FINRA, Waters consented to a bar from associating with any FINRA member firm in any capacity.
Oftentimes brokerage firms can be held liable for the brokers’ misconduct if they failed to supervise them while registered at the firm. If you lost money due to your broker’s unsuitable recommendations, you may be able to recover from your broker or the brokerage firm where he or she was registered. Since 1998, the experienced attorneys at ChapmanAlbin LLC have been fighting for victims of investment fraud and broker misconduct. Call us today at 1-877-410-8172 for a free consultation.