South Florida Arbitration & Litigation Lawyer Blog
Fraud, Churning and Unsuitable Recommendation FINRA Arbitration and Litigation Attorney, Russell L. Forkey, Esq.
January, 2012:
Charles Bacon Rowley III (CRD #842096, Registered Principal, Waltham, Massachusetts) submitted a Letter of Acceptance, Waiver and Consent in which he was fined $5,000, suspended from association with any FINRA member in any capacity for six months, and ordered to disgorge commissions and pay $23,684, plus interest, in partial restitution to a customer. The fine and restitution must be paid either immediately upon Rowley’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 findings, Rowley consented to the described sanctions and to the entry of findings that he recommended and engaged in excessive, unsuitable trading in customers’ accounts. The findings stated that Rowley did not have reasonable grounds for believing that the recommended trades were suitable for the customers, and the trading was inconsistent with the customers’ age, investment objectives, financial situation and needs. The findings also stated that Rowley’s trades generated total gross commissions of approximately $79,433. One customer’s account decreased in value by approximately $177,000 and the other customer’s account experienced a realized loss of $143,166.26.
The suspension is in effect from December 5, 2011, through June 4, 2012. (FINRA Case #2009020612001