TAG | UITs
Comments off · Posted by Securities Lawyer in FINRA
It was reported on FINRA’s BrokerCheck that in October of 2012, Clyde Marshall Thornburg, CRD# 1065161, was permanently barred from association with any FINRA member in any capacity by FINRA. Thornburg allegedly traded UITs (Unit Investment Trusts), corporate debt obligations, and mutual funds in his customers’ accounts. FINRA found that Thornburg executed trades that were unsuitable for his clients because of the trade size, frequency, the customer’s investment objectives, circumstances, and financial situations. Thornburg allegedly generated $300,000 in commissions for his firm, a large portion of which he received. FINRA also alleged that Thornburg forged or had others forge the names and/or signatures of customers on forms, and provided false information involving customer risk tolerance and investment objectives.
This broker was previously registered with FINRA at the following brokerage firms listed on FINRA’s BrokerCheck:
INTERNATIONAL FINANCIAL SOLUTIONS, INC.
08/2010 – 11/2010
WOODBURY FINANCIAL SERVICES, INC.
12/2009 – 06/2010
NEXT FINANCIAL GROUP, INC.
08/2007 – 12/2009
If you experienced financial losses because of Clyde Marshall Thornburg, call Soreide Law Group, and speak to an attorney regarding potential recovery of your losses at 888-760-6552.
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Comments off · Posted by Securities Lawyer in FINRA
In a November 15th., 2011, Bloomberg Businessweek article they write that a unit of JPMorgan Chase & Co. was ordered to reimburse investment customers more than $1.9 million and was fined $1.7 million over how it sold unit investment trusts and floating-rate loan funds.
FINRA, the Financial Industry Regulatory Authority announced the settlement on Tuesday after its investigators found that brokers with Chase Investment Services Corp. made purchase recommendations to investors who weren’t suited to the complex investments. The securities industry’s self-regulatory body, FINRA, said that the products were pitched to “unsophisticated customers with little or no investment experience and conservative risk tolerances.”
The Bloomberg article goes on to say that FINRA also faulted Chase’s supervisory procedures to monitor sales of UITs and floating-rate loan funds. Chase did not provide brokers with sufficient training and guidance regarding the risks and suitability of UITs and floating-rate funds.
A UIT is decribed as an investment in baskets of diversified securities which can include high-yield bonds. That category, also known as junk bonds, can earn investors greater returns than investment-grade bonds, but junk bonds also are more volatile, with a higher risk of loss.
The description of floating-rate loan funds are mutual funds that invest in short-term bank loans made to companies whose credit is rated below investment grade. The income that investors receive adjusts with changes in the interest rate that banks charge on the loans.
The Bloomberg article says that Chase brokers made almost 260 unsuitable recommendations to purchase UITs to customers, FINRA said. Those customers suffered losses of about $1.4 million as a result of their purchases.
FINRA said the floating-rate loan funds that Chase sold were subject to significant credit risks, and some were invested in assets that could not easily be sold and converted to cash. Customers suffered losses of nearly $500,000 as a result of Chase’s recommendations, FINRA said.
In concluding the settlement, Chase neither admitted nor denied the findings, but consented to them, FINRA said.
Securities Attorney, Lars Soreide, of Soreide Law, PLLC, has represented clients nationwide. If you or a family member have experienced losses through JP Morgan Case & Co., or Chase Investment Services Corp., call a Securities Arbitration Lawyer for a free consultation on how to potentially recover your losses. To speak with an attorney, call 888-760-6552, or visit www.securitieslawyer.com.
Soreide Law Group, PLLC., representing investors nationwide before FINRA the Financial Industry Regulatory Authority.
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