Richard Gomez of New York, New York, a stockbroker formerly registered with Avenir Financial Group, has been suspended for one year from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that Gomez, inter alia, effected unauthorized and excessive trades in the customers’ accounts. Letter of Acceptance, Waiver and Consent, No. 2014039358003 (Jan. 18, 2017).
According to the AWC, in December of 2013, Gomez advised customers CW and DW, a married couple, to transfer outside retirement account holdings to Avenir, in which Gomez would be responsible for servicing the customers’ accounts. The AWC stated that $300,000.00 had been transferred to Avenir by DW as a result, in which the proceeds were directed to an individual retirement account. Subsequently, customer CW transferred $44,000.00 to Avenir for purposes of funding an individual retirement account. The AWC indicated that in February of 2014, an additional $750,000.00 had been transferred by CW to Avenir in order to fund a second individual retirement account. Apparently, both CW and DW communicated to Gomez that they wished to invest on a moderate to aggressive basis, with goals of capital preservation.
The AWC revealed that from January of 2014 to November of 2014, one hundred and sixty-one transactions had been effected by Gomez in CW’s individual retirement accounts. The AWC stated that Gomez lacked any authorization to place the trades, and the firm did not deem CW’s account as approved for purposes of discretionary trading. Further, Gomez reportedly failed to converse with CW regarding the transactions on the days in which the transactions had been executed. Additionally, sixty-one trades were reportedly effected on an unauthorized basis by Gomez in individual retirement accounts owned by DW. FINRA found that Gomez’s conduct in this regard was violative of FINRA Rule 2010 and NASD Rule 2510(b).
The AWC further detailed that Gomez’s transactions in DW’s and CW’s accounts were excessive. Particularly, CW’s first individual retirement account was exposed to an annual cost/equity ratio of more than forty-five percent, and an annual turnover rate of twenty-six. Apparently, CW sustained losses estimated at $18,000.00 due to Gomez’s trading; however, Gomez accumulated commissions which totaled $4,400.00. CW’s second individual retirement account was evidently exposed to an annual cost/equity ratio of more than seventy-five percent, and an annual turnover rate of twenty-three. The AWC revealed that CW lost $75,000.00 due to Gomez’s trading, even though Gomez raked in a whopping $385,000.00 in commissions.
Additionally, DW’s individual retirement account was reportedly exposed to an annual cost/equity ratio of nearly forty-five percent, with an annual turnover rate of over twenty. DW evidently sustained investment losses estimated at $120,000.00, which accounted for thirty-nine percent of the balance which DW opened his individual retirement account with. Throughout this time, a reported $94,000.00 in commissions had been generated by Gomez. FINRA found that Gomez’s conduct was violative of FINRA Rules 2010 and 2111.
The AWC also detailed that Gomez effected trades in customer DK’s account which were qualitatively unsuitable. Specifically, the AWC stated that Gomez failed to effect a ten position strategy which DK and Gomez discussed and agreed to be implemented within DK’s individual retirement account. Rather, ninety-seven percent of the assets were purportedly utilized by Gomez to purchase one security’s shares. Gomez’s effected transactions apparently caused DK to sustain investment losses while Gomez raked in commissions estimated at $30,000.00.
FINRA found that Gomez failed to trade in DK’s account in any suitable manner, as the strategy which Gomez implemented was not consistent with the instructions which DK set forth, nor the objectives for investing and risk tolerance which DK communicated to Gomez. FINRA found that Gomez’s conduct in this regard was violative of FINRA Rules 2010 and 2111. Additionally, FINRA determined that Gomez’s transactions in DK’s account were unauthorized.
FINRA Public Disclosure reveals that Gomez has been identified in three customer initiated investment related disputes containing allegations of Gomez’s misconduct while employed with Legend Securities, Inc. and Avenir Financial Group. Particularly, on May 25, 2016, a customer was awarded $150,375.98 in damages according to an investment related arbitration claim involving Gomez’s misconduct, based upon allegations that Gomez negligently handled the customer’s investment account, breached his contractual duties, made misrepresentations to the customer, violated New York Consumer Protection Act, and defrauded the customer in connection with over-the-counter equity transactions.
Further, on January 14, 2016, a customer filed an investment related arbitration claim involving Gomez’s conduct, in which the customer requested 110,000.00 in damages based upon allegations that Gomez effected unsuitable, excessive and unauthorized over-the-counter equity transactions, and ultimately churned the customer’s account.
Subsequently, on July 11, 2016, a customer filed an investment related arbitration claim regarding Gomez’s activities in which the customer requested $100,001.00 in damages based upon allegations that Gomez sold fraudulent equity investments to the customer. The customer additionally alleged that Legend Securities, Inc. negligently hired Gomez and failed to adequately supervise Gomez’s activities.
Since March 10, 2016, Gomez has been associated with sixteen different broker dealers, twevle of which have been expelled by securities regulators for violation of federal securities laws or are otherwise defunct. #cockroach
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