Ernest Julius Romer III, of Sterling Heights, Michigan, a stockbroker registered with CoreCap Investments, Inc., has been terminated from employment on January 20, 2017, based upon allegations that he violated the firm’s policies relating to his undisclosed outside business activities and transactions in customer accounts.
Financial Industry Regulatory Authority (FINRA) Public Disclosure reveals that on two occasions, Romer has been sanctioned by Financial Industry Regulatory Authority (FINRA) for misconduct. Particularly, on January 15, 2013, Romer was fined $30,000.00 and suspended from associating with any FINRA member in any capacity based upon his consent to findings that he made unsuitable investment recommendations to customers and engaged in discretionary trading in customer accounts. Letter of Acceptance, Waiver and Consent, No. 2011025852103 (Jan. 15, 2013).
According to the AWC, while Romer was associated with Leonard & Company, he made investment recommendations to firm customers concerning the purchase and sale of inverse floater collateralized mortgage obligations, even though Romer lacked an adequate basis to recommend the products. The AWC stated that no adequate due diligence or investigation had been performed by Romer regarding the inverse floater CMO products. Romer reportedly failed to analyze the characteristics and risks pertaining to the investments, and lacked experience and the proper training at the time he made investment recommendations to customers. FINRA found that Romer’s conduct was violative of FINRA Rule 2010, NASD Rules 2110 and 2310.
Further, the AWC stated that Romer effected the purchases of inverse floater collateralized mortgage obligations in ten customers’ accounts, even though Romer lacked authorization from customers and his firm to exercise discretion in the customers’ accounts. FINRA found that Romer’s conduct in this regard was violative of FINRA Rule 2010, and NASD Rules 2110 and 2510.
FINRA Public Disclosure additionally reveals that Romer has been identified in five customer initiated investment related disputes containing allegations of his misconduct while employed with Comerica Securities, Inc. and Natcity Investments, Inc. Particularly, on November 9, 1998, a customer initiated investment related written complaint involving Romer’s conduct was settled for $130,110.71 in damages based upon allegations that Romer effected options trades in the customer’s account without authorization.
Moreover, on November 17, 2003, a customer was awarded $100,000.00 in damages according to an investment related arbitration claim involving Romer’s activities, based upon allegations that Romer effected unsuitable variable annuity sub-account allocations, and omitted information from the customer pertaining to investment risks. On November 11, 2005, another customer initiated investment related written complaint regarding Romer’s conduct was resolved for $102,208.53 in damages based upon allegations that Romer failed to abide by the customer’s instructions regarding the amount of over-the-counter equity shares to be purchased, failed to effect a stop loss order pursuant to the customer’s instructions, and mismanaged the customer’s investment account.
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