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TMCNet:  FINRA Bars Registered Representative for Unauthorized and Unsuitable Trading in Elderly Customer's Retirement Account

[March 01, 2017]

FINRA Bars Registered Representative for Unauthorized and Unsuitable Trading in Elderly Customer's Retirement Account

The Financial Industry Regulatory Authority (FINRA) announced today that it has barred former K.C. Ward Financial registered representative Craig David Dima for making unauthorized and unsuitable trades totaling approximately $15 million in a 73-year-old retiree's account, and for misrepresenting the reasons for the trades to the customer.

Susan Schroeder, FINRA Acting Head of Enforcement, said, "There is no place in this industry for brokers who take advantage of elderly customers. Protecting senior investors from predatory behavior such as unsuitable and unauthorized trading is part of our core mission and will always be a priority for FINRA."

FINRA found that on 11 occasions, Dima sold virtually all of the customer's Colgate-Palmolive stock, accumulated over 28 years of employment at the company, without the customer's permission. In fact, Dima sold the customer's shares even after the customer told Dima not to sell the stock, which she considered a valuable long-term investment and reliable source of dividends. When confronted by the customer about the sales, Dima misrepresented to her that they were caused by a "computer glitch" or a technical error. In connection with Dima's unauthorized sales and subsequent repurchases of Colgate stock, Dima charged the customer more than $375,000 in mark-ups, mark-downs and fees and deprived the customer of substantial dividends had she held the Colgate shares as intended.

FINRA also found that Dima's trading of the customer's olgate shares was unsuitable and violated FINRA rules prohibiting excessive mark-ups and mark-downs.

In settling this matter, Dima nether admitted or denied the charges, but consented to the entry of FINRA's findings.

Investors can obtain more information about, and the disciplinary record of, any FINRA-registered broker or brokerage firm by using FINRA's BrokerCheck. FINRA makes BrokerCheck available at no charge. In 2016, members of the public used this service to conduct 111 million reviews of broker or firm records. Investors can access BrokerCheck at http://www.finra.org/brokercheck or by calling (800) 289-9999. Investors may find copies of this disciplinary action as well as other disciplinary documents in FINRA's Disciplinary Actions Online database. Investors can also call FINRA's Securities Helpline for Seniors at (844) 57-HELPS for assistance or to raise concerns about issues they have with their brokerage accounts and investments.

FINRA is dedicated to investor protection and market integrity. It regulates one critical part of the securities industry - brokerage firms doing business with the public in the United States. FINRA writes rules, examines for and enforces compliance with FINRA rules and federal securities laws, registers broker-dealer personnel and offers them education and training, and informs the investing public. In addition, FINRA provides surveillance and other regulatory services for equities and options markets, as well as trade reporting and other industry utilities. FINRA also administers a dispute resolution forum for investors and brokerage firms and their registered employees. To see if your investment professional is regulated by FINRA, please go to BrokerCheck. And for more information, visit www.finra.org.


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