Doraine Refused To Cooperate In FINRA’s Investigation
The Financial Industry Regulatory Authority (FINRA) has barred former Next Financial broker, Charles Doraine after he refused to give testimony in the self-regulatory organization’s (SRO’s) probe into allegations that he unsuitably recommended Puerto Rico bonds to customers.
Already, Doraine has been the subject of investor claims accusing him of overconcentrating customer accounts with these municipal bonds and engaging in short-term trading.
For the last seven years, Shepherd Smith Edwards and Kantas (SSEK Law Firm) has been helping investors fight to recover the losses they sustained from municipal bond funds and closed-end bond funds. We work with investors on the island and in the US mainland and have successfully recovered millions of dollars for our clients against some of the biggest brokerage firms that were involved.
If Doraine or any other stockbroker recommended that you invest in Puerto Rico municipal bonds and you would like to explore your legal options, contact SSEK Law Firm today.
Former Customers Allege Overconcentration, Excessing Trading & Unsuitable Recommendations
Doraine settled FINRA’s case without denying or admitting to the findings. However, a customer dispute accused the ex-Next Financial broker of excessively trading mutual funds and bonds in an account and recommending that the portfolio be overconcentrated in Puerto Rico municipal bonds.
That arbitration case was settled for $3.05M. Another mutual fund fraud case in which Doraine was accused of making unsuitable trades in an account that could only tolerate a low mount of risk was settled for $375K. Meanwhile, according to his official broker record, another investor claim from 2019 that accuses the ex-Next Financial broker of improper mutual fund switches over a six-year period is still pending. That customer is seeking $500K in damages.
Other FINRA Arbitration Cases Naming The Ex-Next Financial Broker
These aren’t the only FINRA arbitration cases that Charles Doraine has been involved in. Prior to 2006, the ex-stockbroker was also involved in the following investor claims:
- A churning case that also alleged unauthorize trading and misrepresentations was settled for $400K.
- A churning and unsuitable trading case that was resolved for $350K.
- An unauthorized trading claim from the ’80s, while Doraine was a Merrill Lynch broker, reached a $100K settlement.
- Another authorized trading case, also from his time with Merrill Lynch, was resolved for $53K.
Doraine has over 43 years of experience working in the industry. He began his career in the 1970s as a broker from Merrill Lynch where he worked for over 30 years prior to joining Next Financial in 2007. He stopped working as a financial advisor for Next Financial last year.
Puerto Rico Bond And Closed Bond Fund Investors Suffered Massive Losses
When the Puerto Rico bonds plunged in value in 2013, many thousands of retail investors, retirees, mom and pop shops, and others were hit with catastrophic investment losses they could have never anticipated. Considering these investments were supposed to be low risk and provide tax shelter, it came as a large shock for many investors.
Unfortunately, many broker-dealers and their registered representatives did not apprise their customers of the actual risks they were taking on. Some firms recommended these bonds to investors for whom they were unsuitable. Other brokerage firms, like UBS, encouraged customers to take out securities-backed loans so they could invest in even more of these bonds even though it was against company policy and the firm already knew that a big fail was in the works.
Puerto Rico Bond Fraud Law Firm
SSEK Law Firm continues to pursue investor fraud claims against UBS and the other brokerage firms that sold Puerto Rico municipal bonds.
Contact us today if a broker from Next Financial, UBS, Santander Securities, Oriental Bank, Banco Popular or any other broker-dealer sold you investments in Puerto Rico bond funds and closed-end bond funds and you suspect that fraud or negligence contributed to your losses.