Stoltmann Law Offices is representing investors in arbitration claims where brokers have violated the “Best Interest” rule of the Securities and Exchange Commission (SEC), known as Regulation BI.
In its first enforcement action relating to Regulation BI, FINRA, the U.S. securities industry regulator, fined a former broker, Charles V. Malico, $5,000 for violating Reg BI “by recommending a series of transactions in the account of one retail customer that was excessive in light of the customer’s investment profile and therefore was not in that customer’s best interest,” according to Investment News.
FINRA alleged “Malico’s conduct occurred from July 2020 through November 2021, when he worked for Network 1 Financial Services Inc. He recommended to a customer, a 63-year-old tax preparer who was not identified, that he make more than 350 trades in his account, which generated $54,000 in commissions and other trading costs,” Investment News reported. The customer, who earned $100,000 annually and had a liquid net worth of approximately $50,000, had an account balance of about $30,000.