FINRA Panel Orders Hilliard Lyons to Pay Damages to Elderly Client
In a Financial Industry Regulatory Authority arbitration case, Hilliard Lyons is ordered to pay 84-year-old Elizabeth Nickens $445K in damages for losses she sustained from alleged churning and unauthorized trading. Nickens claims that advisor Christopher Bennett made transactions without her authorization in her retirement accounts, and her assets were allocated in such a way that were not suitable for her or investment goals.
Nickens, as an older investor, had a low risk tolerance and was more interested in preserving her funds. Yet, according to her attorney, more than half of her average account equity was in four stocks. She lost over $300K.
Hilliard Lyons is accused of not properly supervising the trades. The firm and Bennett deny the senior financial fraud allegations.
Bennett’s Finra BrokerCheck record indicates that aside from Nicken’s complaint, he has been named in several other client complaints. While three of those were rejected, two have yet to be resolved.
Merrill Lynch Broker is Accused of Unauthorized Actions
Merrill Lynch, Pierce, Fenner & Smith and broker Lawrence K. Barber will pay the state of Vermont $140K related to a customer complaint accusing the broker of making unauthorized changes to one client’s account. The firm has issued complete restitution to the client.
Barber is accused of inappropriately accessing the client’s online account, not following the latter’s instructions, and failing to abide by Merrill Lynch’s procedures and policies. Meantime, the Vermont Department of Financial Regulation found in its probe that the firm did not adequately supervise the broker to prevent such unauthorized behaviors nor did it address when his actions appeared to purportedly not be in line with firm policies.
FSC Securities Reaches Multimillion-Dollar Securities Settlement with Montana
In a deal reached with the Montana Commissioner of Securities and Insurance, FSC Securities will pay more than $4.6M. That’s $1.3M in restitution, $1.3M to certain clients, a $100K fine, and another $11,900 in restitution to an assistance fund, because of allegedly wrongful actions committed by ex-broker Barry Hartman. The former broker is accused of getting clients to invest in a company belonging to him named Invizeon. Hartman purportedly did not tell them he was on the company’s board.
12 clients invested in the company. Meantime, Hartman allegedly sold 26 clients unsuitable illiquid investments that did not meet their investment goals. He allegedly sold annuities to 16 clients even though they weren’t suitable investments for them either.
Invizeon shuttered its doors in 2015, causing clients to sustain investment losses. FSC fired Hartman for not disclosing that he was involved in an outside business. FINRA has barred him as a broker or from dealing with brokerage firms in the future.
Aside from the fine and restitution, FSC also will “waive or refund surrender penalties” on nearly $2.7M of the unsuitable annuities to the clients that bought them.
Hilliard Lyons to pay nearly $500k after client says it was too risky with investments, BizJournals, February 21, 2018
Vermont to receive $140,000 from Merrill Lynch and agent for unauthorized actions, Dept. of Financial Regulation, February 27, 2018
Montana announces settlement with securities company over Missoula fraud, Billings Gazette, February 26, 2018
More Blog Posts:
Ex-Wells Fargo Broker Barred for Alleged $180K Elder Financial Fraud, Stockbroker Fraud Blog, February 26, 2018
UBS Must Pay Five Clients $521,000 Over Puerto Rico Bond Fraud, Stockbroker Fraud Blog, February 24, 2018
Multi-Million Dollar Investment Adviser Fraud Cases Target Widows, Older Investors, and Other Retail Investors, Stockbroker Fraud Blog, December 28, 2017