ON WILLOUGHBY Sell You Unsuitable UITs?
Soreide law Group is reviewing potential investor claims against Morgan Stanley securities broker Ron Willoughby Jr. (CRD#: 2425926, Tempe, Arizona). Notably, the Financial Industry Regulatory Authority (“FINRA”) issued Willoughby a suspension and fine of $5,000 for engaging in an unsuitable pattern of early rollovers of unit investment trust (“UIT”) products in violation of NASD and FINRA rules. The sanctions come from Willoughby’s submission of a Letter of Acceptance, Waiver, and Consent (“AWC”) #:2017055692301 on April 29, 2019, which FINRA accepted on June 6, 2019. As a result, Willoughby cannot act as a securities broker from July 1, 2019 to September 30, 2019. Here is a summary of the disciplinary action:
Ron Willoughby Inappropriately Recommends Early Rollovers Of UITs
Mainly, FINRA says that Ron Willoughby recommended for clients to make early rollovers of UITs with 15 or 24 month maturities. Between July 2012 and December 2014, Willoughby evidently recommended on 900 occasions that clients roll over UITs more than 100 days before the UITs matured. Because of this, the clients only held the UITs for an average of just 191 days. Willoughby supposedly told clients to buy new UITs with the proceeds. This caused clients to pay another sales charge for each successive UIT purchase.
The AWC stated that 100 of the 900 occasions involved series-to-series UIT rollovers. In those occasions, Ron Willoughby would tell a client to roll over the client’s UIT to another UIT in the same series. FINRA says that the UITs Willoughby advised clients to buy contained the same or similar investment objectives as the UITs the clients held.
Willoughby Caused Investors To Pay Excessive Charges On UITs
FINRA indicated that Ron Willoughby’s recommendations of early UIT rollovers caused clients to incur unnecessary sales charges. Because of the frequency of transactions and the costs, FINRA held that Willoughby made unsuitable recommendations to clients. Evidently, Morgan Stanley agreed in September 2017 to reimburse clients for the excessive sales charges stemming from Willoughby’s recommendations. FINRA stated that Willoughby violated NASD Rule 2310, FINRA Rule 2111 and FINRA Rule 2010.
FINRA has been vocal about its concerns about UITs. Indeed, in the AWC, FINRA indicates that short-term trading of UITs is presumptively improper. This is mainly because of UITs having long maturities and high costs. FINRA said that rolling over UITs early can cause investors to pay a substantial amount in sales charges.
If that is not enough to raise your concerns, investors filed disputes about Ron Willoughby:
LPL Financial Customer Files Complaint Suggesting Ron Willoughby Sold Unsuitable UITs
A customer of LPL Financial LLC, who Ron Willoughby worked from 2016 to 2018, filed an investment dispute about Willoughby on October 23, 2017. Mainly, the customer claimed that Willoughby sold unreasonable UITs to the customer. Supposedly, those investments did not match the customer’s investor profile or goals. Eventually, LPL Financial LLC opted to pay the customer $33,035.29 to settle this matter January 9, 2018.
Morgan Stanley Customer Files Arbitration Alleging Willoughby Sold Overly Risky UITs
A second customer dispute comes from a Morgan Stanley customer who filed FINRA Arbitration #:09-03735 on August 6, 2009. Namely, the customer suggested that Ron Willoughby made irrational UIT purchases for the customer’s account. Allegedly, this customer asked to be invested in conservative investments but Willoughby did not listen. All things considered; Morgan Stanley paid the customer $87,500 to put the customer’s suitability claim to rest.
Willoughby now lives in the Venice California area and works for Kestra Investment Services LLC. Did Ron Willoughby Jr. cause you to suffer investment losses? 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 firm has recovered millions of dollars for investors who have suffered losses due to misconduct of brokers and brokerage firms.