South Florida Arbitration & Litigation Lawyer Blog
FINRA Securities Arbitration Lawyer, Russell L. Forkey, Esq.
June, 2011:
Uzo Omar Chima (CRD #3067054, Registered Principal, Baltimore, Maryland, formerly licensed with SunTrust Investment Services) submitted an Offer of Settlement in which he was fined $75,000, suspended from association with any FINRA member in any capacity for two years, and ordered to pay $12,443.73, plus interest, in restitution to customers. The fine and restitution must be paid either immediately upon Chima’s reassociation with a FINRA member firm following his suspension, or prior to the filing of any application or request for relief from any statutory disqualification, whichever is earlier. Without admitting or denying the allegations, Chima consented to the described sanctions and to the entry of findings that he engaged in a pattern of unsuitable short-term trading and switching of unit investment trusts (UITs), closed-end funds (CEFs) and mutual funds in retired and/or disabled customer accounts without having reasonable grounds for believing that such transactions were suitable for the customers in view of the nature, frequency and size of the recommended transactions and in light of their financial situations, investment objectives, circumstances and needs. The findings stated that some of the transactions were effected through excessive use of margin and without ensuring that customers received the maximum sales charge discount. The findings also stated that in furtherance of his short-term trading strategy, Chima engaged in discretionary trading without prior written authorization, falsified customer account update documents and mismarked trade tickets for each of the customers’ accounts, stating that the orders were unsolicited when, in fact, they were solicited. The findings also included that the transactions generated approximately $450,000 in commissions for Chima and his firm, and approximately $370,000 in losses to the customers; some customers also paid over $75,000 in margin interest. FINRA found that in numerous UIT purchases, none of which exceeded $250,000, Chima failed to apply the rollover discount to which each customer was entitled. FINRA also found that Chima caused his member firm’s books and records to be false in material respects, in that he provided false information on customer update forms for customers’ accounts, signed the forms certifying that they were accurate and submitted them to his firm.
The suspension is in effect from April 18, 2011, through April 17, 2013. (FINRA Case #2006007105101)