Brookstone Securities, Inc. (CRD #13366, Lakeland, Florida), Christopher Dean Kline (CRD #2597293, Baraboo, Wisconsin), David William Locy (CRD #4682865, Overland Park, Kansas) and Antony Lee Turbeville (CRD #1721014, Lakeland, Florida).
Brookstone Securities, Inc. was censured, fined $1,000,000 and required to pay, with Kline and Turbeville, $1,620,100, plus prejudgment interest, in restitution to their clients. Kline and Turbeville were barred by FINRA and Locy was fined $25,000, barred from association with any FINRA member in any supervisory or principal capacity, and suspended by FINRA for two years. These sanctions were imposed by the National Adjudicatory Council (NAC) following appeal of an Office of Hearing Officers (OHO) decision.
These sanctions were based on findings that in connection with the purchase or sale of collateralized mortgage obligations (CMOs), Brookstone Securities, Inc., acting through Turbeville and Kline, fraudulently made misrepresentations of facts and omitted material facts that misled senior and retired customers concerning the risks associated with CMOs.
FINRA’s findings stated that Brookstone Securities, Inc., acting through Turbeville and Kline, recommended that clients purchase high-risk CMOs without reasonably believing that the securities, including those purchased on margin, were suitable for the clients based on their age, investment objectives, financial background and risk tolerance.
FINRA’s findings also stated that Brookstone Securities, Inc. and Turbeville made misrepresentations, omitted material facts, and utilized misleading statements in letters sent to some of their clients. The findings also included that Brookstone Securities, Inc., acting through Locy, its CCO, failed to review customer discretionary accounts at frequent intervals.
FINRA found that Brookstone Securities, Inc., acting through Locy, failed to reasonably supervise the firm’s activities, and that the firm, acting through both Turbeville and Locy, also failed to enforce the firm’s procedures for safeguarding customer information, both in willful violation of FINRA’s rules.
This matter has been appealed to the Securities and Exchange Commission (SEC) and the bars are in effect pending consideration of the appeal.
(FINRA Case #2007011413501)
This ends the summary of information located on FINRA’s website from July 2015 Disciplinary Report.
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