CMD is Investigating Claims Against Glenn King and Buckman, Buckman & Reid, Inc. for Excessive Trading and Failure to Supervise

Securities law firm Carmel, Milazzo & DiChiara LLP (CMD) is investigating claims against securities broker Glenn King and brokerage firm Buckman, Buckman & Reid, Inc. for unsuitable recommendations, excessive trading (a/k/a churning) and failure to supervise.

In August 2016, Glenn King was barred from association with any FINRA member.   The sanction was based on findings that Glenn Robert King fraudulently misrepresented and omitted material facts to customers, recommended and executed unsuitable transactions in customer accounts, and exercised discretion in customer accounts without authority and his member firm’s approval.  The findings stated that Glenn Robert King used telephone and email to knowingly and willfully make numerous false statements to customers, and omitted material information in connection with his sales of Unit Investment Trust (UITs) to the customers. Glenn Robert King sold UITs to elderly and retired customers of the firm by misrepresenting to them that he was offering safe, high-yield, tax-free bonds and CDs, and omitting material information about the products that he actually sold to the customers.

Glenn King also omitted many of the features and risks of UITs from his sales pitches to firm customers. Additionally, Glenn King failed to disclose to firm customers the sales charges and costs associated with the UITs that they purchased or affirmatively misrepresented to them that he would not charge commission. Glenn King recommended bonds to his customers, but instead purchased UITs that possessed features that he failed to disclose.  Glenn King received $38,000 in commission from these sales.

As a result of this conduct, Glenn King violated Section 10(b) of the Exchange Act and Rule 10b-5, FINRA Rule 2020 and NASD Rule 2120. The findings also stated that Glenn Robert King engaged in excessive and unsuitable short-term trading of long-term investments, such as UITs and closed-end funds (CEFs), in the accounts of firm customers. Glenn Robert King’s trading was quantitatively and qualitatively unsuitable. Glenn Robert King’s frenetic trading was inconsistent with their objectives and financial circumstances, and resulted in customer losses of approximately $163,000.  Glenn Robert King’s misconduct was intentional and resulted in his monetary gain of approximately $210,000 in commissions. Glenn Robert King did not have reasonable grounds to believe that the number of CEF and UIT transactions that he executed in the customers’ accounts were not excessive. The findings also included that Glenn King exercised discretion in customer accounts by effecting trades in their accounts, including transactions involving UITs and CEFs, without obtaining prior written authorization from those customers. Glenn King also failed to obtain the firm’s written acceptance of the accounts as discretionary. In fact, Buckman, Buckman & Reid, Inc. prohibited the use of discretion by its representatives.

If you or someone you know lost money investing with Glenn King and/or Buckman, Buckman & Reid, Inc., you may be entitled to recover your investment losses through FINRA arbitration.  CMD accepts cases on a contingency fee basis, which means we only get paid if you get paid.  Your time to file a claim may be limited, so contact us today at (212) 658-0458 or contact@cmdllp.com for a free and confidential case evaluation.

CMD is Investigating Claims Against Ameriprise Financial Services, Inc. for Unsuitable Closed-End Funds (CEFs)

Securities law firm Carmel, Milazzo & DiChiara LLP (CMD) is investigating claims against brokerage firm Ameriprise Financial Services, Inc. for recommending unsuitable closed-end funds (CEFs) and for failure to supervise.

In August 2016, Ameriprise Financial Services, Inc. entered into an Acceptance, Waiver and Consent (AWC) with FINRA.  According to FINRA, Ameriprise Financial Services, Inc. failed to establish and maintain a system and procedures that were reasonably designed to supervise its registered representatives’ sales of closed-end funds (CEFs) to their customers. The findings stated that despite being aware that CEFs purchased at an initial public offering (IPO) were most suitable for long-term investments, and that the sales charges applied to purchases at the IPO made short-term trading of these CEFs generally unsuitable, Ameriprise Financial Services, Inc. did not have a system and procedures reasonably designed to detect and prevent potentially harmful short-term trading of CEFs.

As a result, Ameriprise Financial Services, Inc. failed to detect and prevent at least one registered representative from engaging in a pattern of unsuitable short-term trading of CEFs purchased at the IPO. The findings also stated that a former registered representative engaged in a pattern of recommending short-term trading of CEFs at the IPO in connection with customer accounts.  On two occasions, the registered representative’s activity was flagged by Ameriprise Financial Services, Inc.’s centralized supervision unit (CSU), which was a group of registered principals responsible for reviewing trading and determining discipline.  However, on each occasion, no demonstrable action was taken, as the CSU registered principals’ attempts at escalation were not properly acted upon, indicating that the firm was not adequately supervising this type of transaction. The findings also included that a CSU registered principal again flagged the registered representative’s activity, and an investigation of the registered representative’s CEF recommendations was undertaken, which ultimately led to the registered representative’s termination.

FINRA  found that Ameriprise Financial Services, Inc. did not utilize any surveillance reports designed to highlight or detect patterns of short-term trading or switching of CEFs. While CSU registered principals generally reviewed CEF IPO transactions, and had the ability to establish filters in their supervisory review tool for purposes of detecting potentially unsuitable patterns, the use of these filters was not required.  As a result, Ameriprise Financial Services, Inc. failed to establish, maintain, and enforce a supervisory system and written supervisory procedures reasonably designed to ensure compliance with applicable laws and regulations relating to the suitability of short-term trading of CEFs at the IPO.

If you or someone you know lost money investing with Ameriprise Financial Services, Inc., you may be entitled to recover your investment losses through FINRA arbitration.  CMD accepts cases on a contingency fee basis, which means we only get paid if you get paid.  Your time to file a claim may be limited, so contact us today at (212) 658-0458 or contact@cmdllp.com for a free and confidential case evaluation.