South Florida Arbitration & Litigation Lawyer Blog
South Florida, FINRA Securities Fraud and Misrepresentation Attorney, Russell L. Forkey, Esq.
May, 2011
Charles Hyman Brown (CRD #858501, Registered Principal, Coconut Creek, Florid, currently licensed with Newbridge Securities Corporation)submitted a Letter of Acceptance, Waiver and Consent in which he was fined $5,000 and suspended from association with any FINRA member in any principal capacity for 30 days. Without admitting or denying the findings, Brown consented to the described sanctions and to the entry of findings that he failed to reasonably supervise a registered representative of his member firm who churned a customer trust account and recommended investments to the elderly beneficial owner of the trust account that were inconsistent with the customer’s investment objectives, financial situation and needs. The findings stated that Brown served as the assistant branch manager for his firm’s branch office and, as such, was one of the individuals at the firm with supervisory responsibility over the registered representatives at the branch office. The findings also stated that there were numerous red flags indicating that the registered representative was churning the trust account and recommending unsuitable investments to the customer. The findings also included that the red flags were the appearance of the account on numerous exception reports concerning active and aggressive trading; the account’s relatively substantial fluctuations in value, including relatively significant declines in value in a certain year; the customer’s age; the $2,500 monthly withdrawals that the customer was taking from the account; and the prior customer complaints against the registered representative. FINRA found that despite these red flags, Brown failed to take adequate supervisory action reasonably designed to prevent the representative’s churning of the trust account and recommendations of unsuitable investments to the customer. The suspension is in effect from April 18, 2011, through May 17, 2011. (FINRA Case #2008011707003).
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