FINRA Issues Fine, Suspension To Wells Fargo’s Elizabeth Guarino
The Financial Industry Regulatory Authority (“FINRA”) announced that it issued a fine and suspension to Elizabeth Guarino (CRD#: 1264531, Woodbury, NY) for violating FINRA rules on suitability and trading. Namely, the broker, who worked for Wells Fargo Clearing Services, LLC from May 15, 2008 to November 8, 2017, executed a Letter of Acceptance, Waiver, and Consent (the “AWC”) on October 31, 2019 to resolve allegations of her unsuitable and unauthorized trading. Here is a summary of the disciplinary action against Guarino which resulted in her 15-month suspension and $10,000 fine:
Elizabeth Guarino Improperly Advises Client To Buy Risky Securities
First of all, FINRA says that Elizabeth Guarino violated FINRA Rule 2111. This rule requires that the broker have a reasonable basis for believing that a strategy or specific trade is appropriate, or suitable, for the client. Securities brokers are supposed to undertake due diligence on the investments and the client to determine if transactions are suitable. This means that the broker has to take into account things like the client’s needs, age, experience, or investment objectives.
Here, Elizabeth Guarino violated FINRA Rule 2111 through her recommendations to BF from 2014 to 2016. FINRA indicated that at the time, BF was an elderly homemaker who did not have much investment experience and who largely depended on her investment portfolio’s income to supplement her social security income. Notably, BF expressed that she was a conservative investor. Despite all this information, Guarino allegedly told the client to invest in oil and natural gas limited partnerships. Those risky investments were unsuitable, FINRA says.
Guarino Causes Client $74,000 Loss On Breitburn Energy Partners Preferred Stock Recommendation
Supposedly, one of the unsuitable transactions Elizabeth Guarino recommended involved BF’s purchase of Breitburn Energy Partners preferred stock. Not only was this investment categorized by credit rating services to be speculative, but the prospectus indicated that proceeds from preferred securities would be used to reduce Breitburn’s debt – making dividends questionable. Indeed, in April 2016, Breitburn stopped paying dividends to holders of preferred stock. Then the company filed bankruptcy. Because of acting on Guarino’s advice, BF sustained a massive $74,000 loss.
Notably, FINRA mentions in the AWC that Elizabeth Guarino advised the client to make 10 more sketchy purchases of oil and gas limited partnerships. Taking into account BF’s objectives, age, and financial circumstances, FINRA determined that these 10 transactions were also unsuitable. Supposedly, $150,000 or more in BF’s losses are attributable to Guarino’s bad advice.
FINRA Determines That Elizabeth Guarino Made Unauthorized Trades
In addition, the AWC shows that Elizabeth Guarino violated FINRA Rule 2010 by making unauthorized trades. FINRA says that Guarino made as many as 20 trades for BF’s account from March 2014 to April 2016. The AWC indicated that BF did not know about Guarino’s trades until after she made them.
Wells Fargo Client Alleges Guarino Made Unsuitable Trades
A client of Wells Fargo Advisors, LLC brought a formal dispute to challenge Elizabeth Guarino’s sales practices. Specifically, the client claimed that Guarino made unsuitable purchases or sales of energy investments including stocks. Supposedly, the unsuitable trades Guarino made caused the client to experience losses. Evidently, Wells Fargo paid the client $150,000 to settle the matter on September 28, 2017.
Lars Soreide Highest Ethical Standard Award 2018
Guarino’s suspension for unauthorized and unsuitable trading is effective between November 4, 2019 and February 3, 2021. Have you experienced losses by investing with Wells Fargo securities broker Elizabeth Guarino? If so, contact Soreide Law Group at (888) 760-6552 and speak with experienced counsel about a possible recovery of your investment losses. Soreide Law Group represents clients on a contingency fee basis and advances all costs. The law firm has recovered millions of dollars for clients who have suffered losses due to misconduct of brokers and brokerage firms.