Articles Tagged with Unsuitable

AdobeStock_194438920-300x200Former LPL broker Sanders Spangler was barred from the securities industry by the Financial Industry Regulatory Authority (FINRA). LPL terminated him for executing unauthorized trades in non-discretionary customer accounts in February 2017. In March 2018, FINRA barred him due to his failure to appear for an on-the-record testimony. Failure to appear for this results in an automatic bar from the industry. In March 2018, Spangler’s ex-wife alleged that he was forging her account documents. This dispute is currently pending. In October 2017, according to Spangler’s FINRA BrokerCheck report within the industry, available online, a customer alleged that he was over-concentrating the customer’s investments in risky energy stocks. He also alleged that Spangler liquidated his account without permission from the customer. This dispute is also currently pending. In June 2017, a customer alleged that Sanders Spangler instigated unsuitable, unauthorized trades in a non-discretionary customer account without the customer’s knowledge or permission. These are all against securities laws and internal firm rules.
Advisors must have the full consent and written approval of the customer before placing any trades. Unauthorized trading occurs when a broker sells a security without the proper written consent needed from the investor. An advisor must also take into account a customer’s age, net worth, investment objectives and investment risk tolerance, among other things when recommending and selling an investment. If he does not, his brokerage firm may be liable for losses. Energy investments, such as the ones Spangler sold to at least one customer, tend to be highly illiquid, unsuitable investments. If investors lose money because of a broker’s recommendation or sale, the brokerage firm may be liable for losses on a contingency fee basis in the FINRA arbitration forum, because the firm has a duty to reasonably supervise its employees while they are registered there.
Sanders Spangler, according to his online, FINRA BrokerCheck report, was previously registered with Edward Jones in St. Louis, Missouri from July 2000 until October 2005 and LPL in San Antonio, Texas from October 2005 until March 2017. He has six customer disputes against him, one of which is currently pending. They allege suspected forgery, over-concentration in energy stocks, account liquidation without client knowledge, unsuitable investments, unauthorized trading, poor performance, and discretion. He has one regulatory matter against him. He has been permanently barred from the securities industry.

According to a Disciplinary Proceeding with the Financial Industry Regulatory Authority (FINRA), former SW Financial broker Douglas Leone was accused of making potentially unsuitable and excessive transactions in multiple customer accounts. Mr. Leone also failed to appear and provide testimony regarding FINRA’s investigation of him. These are against securities laws and internal firm rules. Excessive trading, also referred to as “churning,” is a particularly egregious form of misconduct by a broker. It is when the broker trades in and out of securities, sometimes in the same stock on the same day, in order to generate large commissions for himself. This typically results in the customer having to pay unnecessary fees. SW Financial may be held liable for investment losses because the firm has a reasonable duty to only recommend and sell those investments that are suitable for customers, based on their age, net worth, investment objectives and investment sophistication. If he does not, the firm may be responsible for money losses in the FINRA arbitration forum on a contingency fee basis.

Douglas Anthony Leone, according to public FINRA records, was previously registered with Gruntal & Co., Gaines, Berland Inc., Renaissance Financial Securities Corp, La Jolla Capital Corp, Foster Jeffries Securities, Cambridge Capital, Whitehall Wellington Investments, Advanced Planning Securities, Joseph Stevens & Company, Basic Investors, Newport Coast Securities and Salomon Whitney Financial (SW Financial) in Melville, New York from March 2013 until March 2017. He has seven customer disputes against him, alleging failure to sell and misrepresentation, fraud and deceit, breach of contract, breach of fiduciary duty, unsuitability, unauthorized trades, failure to correct, excessive commissions, and churning. He has been suspended, and is not currently registered as a broker within the industry.

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