ICHARD COLEMAN Dealt FINRA Suspension
The Financial Industry Regulatory Authority (“FINRA”) announced August 8, 2019 that it suspended securities broker Richard Coleman (CRD#: 2720422, Melville, New York) for excessive trading and mismarking order tickets. In fact, Coleman, who worked for securities firms including Legend Securities (March 2015 through February 2016) and Salomon Whitney Financial (February 2016 through March 2017), executed a Letter of Acceptance, Waiver and Consent (“AWC”) essentially choosing not to contest FINRA’s findings of his unsuitable trading causing clients to experience losses. Here’s more on the matter:
FINRA Confirms Richard Coleman Made “Quantitatively Unsuitable” Trades
First of all, Coleman broke Rule 2111(a), which imposes requirements on the reasonableness of investment recommendations. FINRA says that as a securities broker, Coleman had to do his due diligence on the client before advising frequent trades. FINRA particularly references the concept of Quantitative Suitability which focuses on excessive trading.
Notably, FINRA says that high turnover rates (typically 6 or more), cost-equity ratios (typically 20% or higher), and certain types of in-and-out trading can demonstrate excessive trading and therefore, quantitative unsuitability. Significantly, cost-to-equity ratios look at how much the client’s holdings have to increase in value to cover commissions, fees and expenses. Turnover rates show how often the client’s securities portfolio is switched out for new investments.
Coleman Causes Four Clients To Lose More Than $225,000 By Excessively Trading
Apparently, Coleman violated Rules 2111 and 2010 by making excessive trades in accounts of four clients: JT, SB, TM and AE. He supposedly told the clients what to do and they agreed at their peril. Their accounts contained turnover rates between 40.35 and 71.14. Also, their cost-to-equity ratios were between 117.16% and 210%. Notably, Coleman’s trading caused clients $225,745 in total losses. However, those clients paid $139,930 in total commissions and fees. Also, FINRA says that Coleman broke Rules 4511 and 2010 by mismarking order tickets. Supposedly, Coleman solicited trades but reported that he did not. For this reason, FINRA suspended him.
Legend Securities Client Files FINRA Arbitration Suggesting Richard Coleman Excessively Traded
Evidently, on January 11, 2019, a FINRA Arbitration was filed by a client of Legend Securities Inc. Allegedly, Coleman was negligent in trading this client’s account. Not only did Coleman supposedly violate his fiduciary responsibility to the client regarding stock investments, but he seemingly breached the terms of the client’s investment agreement. FINRA BrokerCheck reports that this client asked for $85,000 in compensation in this pending matter.
Complaints From Other Clients Suggest Coleman Sold Unsuitable Investments
Coleman’s clients indicate in their complaints that he engaged in myriad sales practice violations. For example, Rockwell Global Capital paid $210,000 to a client who brought a claim for Coleman’s supposedly unsuitable equity trades. Benson York Group received a complaint suggesting Coleman poorly managed the client’s account. Before that, a client of A&F Financial Securities Inc. indicated that Coleman made unreasonable and excessive trades of OTC equities. Also, it appears that a Continental Broker Dealer Corp client contended that Coleman did not follow the client’s instructions regarding stock trading. New Castle Financial Services received a complaint from a client about Coleman’s supposed unauthorized trading. Also, Coleman discloses that a client of Whitehall Wellington Investments argued that he bought investments without authorization.
Experienced investment losses due to the unreasonable sales practices of broker Richard Coleman? 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 w
ho have suffered losses due to misconduct of brokers and brokerage firms.