Although the rep’s trading appeared on monthly exception reports showing potentially excessive trading, no one at the firm actually reviewed the reports, Finra said in its complaint.
From 2013 to 2014, the rep's excessive trading of UITs and other long-term investments caused his customers to pay approximately $210,000 in commissions and resulted in losses of approximately $163,000.
BBR and Buckman also failed to identify that a second, now-barred registered rep had excessively traded three customers' accounts. In one example, the rep made more than 130 trades in the account of an 89-year-old retired customer during a one-year period.
Although this customer's account regularly appeared on BBR's monthly exception reports red-flagging potentially problematic activity, no one at BBR actually reviewed those reports or conducted reasonable suitability reviews, Finra said in its complaint.
BBR and Buckman also failed to reasonably supervise the second rep’s recommendations that four additional customers purchase concentrated positions in a single, speculative security, Finra said.
For example, the rep recommended that one customer, whose net worth was less than $200,000, invest every cent of her account holdings in the speculative stock, the regulator found.
Although BBR and Buckman were aware the rep had recommended concentrated positions in the stock to customers, neither took any measures to determine the concentration levels or whether they were suitable for the customers in question.
In settling these charges with Finra, neither BBR nor Buckman admitted nor denied the charges, but consented to Finra's findings.