Glen J. Rauch, of Syosset, New York, a stockbroker formerly registered with Avenir Financial Group, Inc., was barred from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity per an Office of Hearing Officers’ Order Accepting Offer of Settlement containing findings that Rauch effected unsuitable and unauthorized transactions in customer accounts, and engaged in dishonest sales practices which led Avenir Financial Group customers to suffer financial losses. Department of Enforcement v. Glen Rauch, No. 2014039358002 (Nov. 28, 2016).
According to the Order, in September of 2013, Rauch had effected transactions in the account of customer, LM, a novice and unexperienced investor. Rauch was apparently LM’s broker of record on his brokerage account and IRA. The Order reported that LM’s new account documents stated his intent to invest speculatively; however, the customer seemingly never signed such account documents.
FINRA indicated that LM’s intent was actually to invest conservatively. LM evidently indicated to Rauch that he could not bear the risk of losing his assets. The Order stated that LM was assured by Rauch that LM’s funds would be invested safely.
Subsequently, between September and November of 2013, Rauch reportedly overconcentrated LM’s account in equity investments. Particularly, the Order stated that Rauch effected ten transactions which were inconsistent with LM’s investment objectives, and were therefore unsuitable. Additionally, FINRA found that Rauch marked LM’s order tickets as unsolicited, when such transactions were actually solicited by Rauch.
Evidently, Rauch’s conduct was intended to make LM appear to be in control of the options trading which transpired in his investment account. The Order revealed that on November 19, 2013, LM closed his accounts with the firm after sustaining more than $21,000.00 in losses. FINRA found that Rauch’s conduct concerning LM’s accounts was violative of FINRA Rules 2010, 4511, 2360(b), and 2111.
Additionally, the Order stated that from June of 2014 to September of 2014, Rauch’s conduct caused investment losses in the account of customer, SM, an individual who intended to invest on a conservative to moderate basis. SM reportedly relied upon the funds invested with Rauch to address the medical needs of her disabled son. Rauch apparently effected, in an unauthorized manner, thirty-seven transactions in SM’s account. SM was evidently never contacted by Rauch prior to such transactions being effected.
The Order further revealed that Rauch made unsuitable recommendations to SM concerning options transactions. Particularly, Rauch reportedly failed to converse with SM concerning options trading risk, and SM was not cognizant of such risks. Even though SM communicated her conservative investment objectives to Rauch, Rauch nonetheless effected risky options transactions. SM consequently incurred thousands of dollars in investment losses, according to the Order. Further, Rauch purportedly caused SM’s order tickets to be mismarked as unsolicited. FINRA found that Rauch’s conduct concerning SM’s accounts was violative of FINRA Rules 2010, 4511, 2360(b), and 2111.
FINRA Public Disclosure reveals that Rauch has been subject to nineteen events concerning allegations of misconduct. Specifically, on September 7, 2001, a customer initiated investment related arbitration claim involving Rauch’s conduct was settled for $27,511.00 in damages based upon allegations that Rauch effected unsuitable and unauthorized trades in the customer’s account.
Additionally, on January 6, 2004, Rauch was terminated from his former employer, J.P. Turner & Company, LLC, based upon allegations that Rauch effected unauthorized discretionary trades in customer accounts. Rauch was later terminated by National Securities Corporation on June 19, 2008, based upon allegations that Rauch contacted customers while suspended and under internal review for customer complaints.
On August 12, 2008, a customer initiated investment related arbitration claim involving Rauch’s conduct was resolved for $6,000.00 in damages based upon allegations that Rauch churned customer accounts, and effected unauthorized and excessive trades in customer accounts. Further, on October 19, 2004, a customer initiated investment related arbitration claim involving Rauch’s actions was settled for $75,000.00 in damages based upon allegations that Rauch made misrepresentations to the customer concerning investments and failed to follow the customer’s instructions.
On October 19, 2014, Rauch became subject to another customer initiated investment related arbitration claim, in which a customer requested $370,000.00 in damages based upon allegations that Rauch made misrepresentations to the customer concerning account balances, failed to follow the customer’s instructions, and did not adequately hedge the customer’s risk.
Seven of the last ten broker-dealers Rauch has been associated have been expelled from FINRA membership for the violatoinof self-regulatory rules or the federal securities laws, or are otherwise defunct. #cockroach
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