South Florida Arbitration & Litigation Lawyer Blog
FINRA Arbitration Mutual Fund Switch and Fraud Arbitration Attorney, Russell L. Forkey, Esq.
August, 2011:
Shane Anthony Sterling (CRD #4640502, Registered Representative, Pleasant Hill, Iowa) submitted a Letter of Acceptance, Waiver and Consent in which he was barred from association with any FINRA member in any capacity. Without admitting or denying the findings, Sterling consented to the described sanction and to the entry of findings that he recommended and conducted a pattern of unsuitable mutual fund switches in the accounts of customers, some of whom were seniors, and several with limited investment experience and financial resources. The findings stated that Sterling recommended that each of these customers buy and sell class A mutual fund shares in their investment accounts at Sterling’s firm, which he serviced; these customers accepted the recommendation and purchased and sold class A mutual fund shares in their investment accounts. The findings also stated that for these transactions, Sterling recommended and purchased mutual funds outside of the fund family when he could have switched to other funds within the same fund family cost-free, or at a much lower cost to the customer; by switching outside of the fund family, the customers incurred another front-end sales load for each class A mutual fund buy transaction in their account, and this pattern of mutual fund switching in each of these customers’ accounts was unsuitable. The findings also included that Sterling represented on his firm’s documents that each of the transactions was unsolicited when, in fact, Sterling recommended and solicited the transactions. (FINRA Case #2010022525001);