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Ex-Broker Charged With Improper Trading

FINRA charged David Randall Lockey, a former broker, with profiting as a result of improper trading of customer accounts over a span of nearly two years. According to FINRA's complaint, Lockey “engaged in unsuitable short-term trading and switching in” mutual funds and unit investment trusts in four accounts between May 2012 and March 2014 during his time as a representative of SWS Financial Services Inc., now known as Hilltop Securities Independent Network Inc. Lockey's improper trading created gross compensation of roughly $75,730 for him and SWS while three of the four customers lost a sum of $15,699. Those customers included a social worker, a bookkeeper for a family-owned business and a commercial services driver. The last customer, who is a retired engineer, had a "small gain" of $4,948, according to FINRA. According to FINRA's BrokerCheck, Lockey is a named Respondent in a recently filed customer complaint. The complain alleges that Lockey recommended and engaged in a pattern of unsuitable short-term trading [...]

By |April 5th, 2016|Press Releases & News, Broker Check, FINRA|
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FINRA Panel Orders UBS To Pay For Bond Losses

A FINRA arbitration panel ordered UBS Group AG's wealth management business for the Americas to pay over $470,000 to three investors who claimed damages because their accounts were over-concentrated in Puerto Rico bonds that plummeted. The investors--Obdulio Melendez Ramos, Ramon Velez Garcia and Carlos L. Merced--filed the arbitration in 2014 and sought up to $570,243 in damages, alleging fraud and negligent supervision. "Although the arbitrators awarded less than the full damages the claimants requested, UBS is disappointed with the decision to award any damages, with which we respectfully disagree," said Gregg Rosenberg, a spokesman for UBS. "The decision in this case was based on the facts and circumstances particular to these particular claimants, and is not indicative of how other panels may rule with regard to other customers who invested in similar products," he said. Damages related to Puerto Rico's distressed debt were among the litigation matters outlined in the Swiss bank's financial supplement for its fourth-quarter earnings results. The supplement [...]

By |March 25th, 2016|FINRA, Fraud, Press Releases & News|
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Wedbush Fined For Trading Blunders

A number of trading and clearing blunders by Wedbush Securities Inc. pertaining to a customer's redemption activity and trading of leveraged ETFs has led FINRA and the NASDAQ Stock Market to fine the firm $675,000. Wedbush acted as the clearing firm for its broker-dealer customer, Scout Trading, and as an authorized participant of varying exchange-traded funds. This allowed the firm to send redemption/creation orders on Scout Trading's behalf and on the behalf of its other clients, according to FINRA. Between January 2010 and March 2012, Scout Trading was insufficiently long in the ETF shares comprising the redemption orders. Throughout the review period, Scout Trading sent at least 255 naked redemption orders through Wedbush in eleven ETFs, equaling more than 295 million shares.  This naked redemption activity, together with short selling of ETFs on the secondary market by Scout Trading, ended up with numerous substantial failures to deliver by Wedbush. According to the SEC, failures to deliver may [...]

By |March 21st, 2016|FINRA, Press Releases & News, SEC|
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Broker Took $1.7M By Churning Accounts

Broker Edward Beyn allegedly received over $1.7 million in commissions and fees by excessively trading his clients' accounts, or "churning," while he was a registered representative with Craig Scott Capital, according to FINRA's Enforcement Department. FINRA claims Beyn churned nine accounts of six of his customers, all of whom are over 60 years old, between March 2012 and May 2015, making a profit by violating securities rules. His short-term trading strategy involved quickly churning over accounts to generate "outsize commissions for himself" and Craig Scott Capital, according to FINRA's complaint. The clients ranged in age from 61 to 72 at the time they opened their accounts with Beyn. Those clients included business owners involved in construction, welding equipment and airlines parts. All suffered net losses. “He relied heavy [sic] on buying and selling equities of companies releasing their earnings reports as a catalyst for excessively trading,” according to the complaint. Beyn is currently registered with Rothschild [...]

By |March 17th, 2016|Broker Check, FINRA, Press Releases & News|
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