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You may have lost money in your investment portfolio,
due to mismanagement and not even know it.

Out of client's wallet, into his: Finra disbars investment broker

Given the Financial Industry Regulatory Authority's assessment that he "plundered," it was a virtual certainty that a disciplinary hearing conducted recently by a Finra panel would end up badly for a broker under a withering spotlight.

The panel readily conceded that the adviser did actively and in a well-considered manner invest the limited monies of his client.

There was a problem with that, though, ruled regulators: He did so for personal profit and to her sheer detriment pursuant to an unsuitable investment strategy marked by the fraudulent churning of her accounts.

Oh, and there was this: the client was blind and elderly and had over a period of years placed her complete trust in the broker.

When coupled with the adviser's strategy of personal enrichment, those factors collectively spelled a recipe of financial disaster for an individual badly needing a consistent flow of income later in life.

Her situation mandated a conservative investment strategy, stated Finra officials.

Her broker responded to that by making more than 700 trades on her behalf within a few short years. Much of the account activity was wantonly "reckless," noted the panel, being invested in quick buy-sell trades that lost the woman money while lining the pockets of the broker with commissions.

The day of reckoning came last week for the broker when, on Thursday, the panel barred him from the securities industry. He was additionally tasked to pay nearly a quarter of a million dollars in fines and penalties, including restitution to his victim.

Moreover, the brokerage firm that employed him did not escape liability. Finra ruled that it had failed to adequately supervise the broker, and fined it $200,000 for its neglect. The firm also paid $20,000 to the victim.

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