Two Brokers Barred After Not Appearing at FINRA Hearings
Guillermo Valladolid, an ex-Morgan Stanley (MS) broker, has been barred by the Financial Industry Regulatory Authority. According to the regulator, Valladolid did not show up at a hearing into whether, according to InvestmentNews, he “sold investments away from his employer” and neglected to disclose certain outside business activities.
Morgan Stanley terminated Vallodolid’s employment. Previous to that he worked with Merrill Lynch.
In a different FINRA case, the regulator barred another broker, Bradley C. Mascho, also after he did not appear at his hearing. Some of Mascho’s activities while at Western International Securities had come under question. The firm fired him last month, which is also when the US Securities and Exchange Commission filed fraud charges against Mascho and Dawn Bennett of the Bennett Group Financial and DJP Holdings. Mascho was CFO of the latter.
The regulator is investigating their involvement in an alleged fraud that involved the sale of over $20M in promissory and convertible notes to investors. Mascho is the subject of a related criminal case in Maryland.
Questar Capital is Censured Over Mutual Fund Sales Waivers
Without denying or admitting to the findings, Questar Capital Corp. has agreed to pay $796,892 in restitution to eligible customers for not waiving the mutual fund sales charges for which they qualified.
Either that, FINRA found, or they were sold Class C shares and Class B shares, with sales charges on the back-end, and also were charged ongoing fees and higher costs. The customers should have been able to buy Class A shares in specific mutual funds without having to pay the sales charge on the front-end. Eligible customers were overcharged more than $680K as a result.
FINRA said that the firm did not reasonably supervise this process and depended on its financial advisers to decide whether the sales-charge waivers should be applied. Questar Capital purportedly did not provide these advisers with the “adequate” written policies and procedures to make such determinations. The regulator also claims that the firm did not properly train the advisers on this matter.
Morgan Stanley Smith Barney Fined $150K for Not Issuing Margin Disclosures
To resolve FINRA’s finding that the firm did not send about four million margin disclosures in ’12, ’13, and ’14, Morgan Stanley Smith Barney LLC (MS) will pay $150K. It has agreed to the entry of findings but did not deny or admit to them.
Margin disclosures let customers know about not just the risks involved with trading securities on margin, but also the procedures. The regulator said that between ’12 and ’14, Morgan Stanley left it up to certain groups and individuals to provide customers with the mandated disclosures. However, it did not formally appoint anyone to make sure that customers received their annual margin disclosure statements.
Finra bars former Morgan Stanley rep over hearing no-show, InvestmentNews, January 16, 2018
Finra bars broker involved with Dawn Bennett, InvestmentNews, January 6, 2018
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