Cetera Advisor Networks
According to the Financial Industry Regulatory Authority (FINRA), the regulator has fined Cetera Advisor Networks $700,000 and ordered $691,800 in customer restitution in connection with excessive trades, also known as “how” in the securities industry.
Cetera Advisor Networks must pay close to $1.4 million in fines and restitution in regards to the short-term mutual fund purchases of a former broker working in Chadds Ford, Pennsylvania.
According to the letter of Acceptance, Waiver & Consent, the broker allegedly made hundreds of short-term purchases and sales of A-share mutual funds in the accounts of 14 customers, some of them seniors. Customers were reportedly charged new front-end commissions with each trade, enriching the broker and the firm, but lost clients nearly $700,000 over a six-year period, FINRA said.
According to FINRA, the broker allegedly tried to hide the mutual-fund churning via stock trading between mutual fund sales and purchases. He was reportedly barred in 2017 for failure to provide testimony in an investigation.
FINRA said Cetera Advisor Networks allegedly failed to respond reasonably to “red flags” associated with the broker’s conduct between 2009 and 2015.
According to the AWC, the broker received sales awards in 2013 and 2014 from Cetera Advisor Networks, even after his designated supervisors had flagged the excessive trading to the home office.
The firm finally took action against the broker in February 2015, after FINRA reportedly began its investigation following an outside tip, according to the AWC.
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This is information is all publicly available on FINRA’s website, and provided to you by The White Law Group.
If you are concerned about your investments with Cetera Advisor Networks please contact the securities attorneys at The White Law Group for a free, no-obligation consultation at (888)637-5510.
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