Gary Max Bowman, of Corona, California, a stockbroker formerly registered with Sagepoint Financial Inc., has been fined $10,000.00 and suspended for three months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity founded on findings that Bowman engaged in unsuitable trading of unit investment trusts (UITs) when he was registered with Sagepoint Financial Inc. Letter of Acceptance, Waiver, and Consent No. 2018056858102 (July 1, 2021).
According to the AWC, between February of 2013 and December of 2017, customers were advised by Bowman to effect premature rollovers of unit investment trusts. On 4,200 occasions, customers were told to roll over UITs at least one hundred days before maturity. The regulator states that the UITs generally contained two-year maturities, but Bowman had customers hold them for approximately one year on average before recommending that customers sell them to buy new ones.
The AWC states that six hundred of the premature rollovers involved series-to-series rollovers. This meant that the stockbroker recommended for customers to sell their unit investment trusts before maturity to buy a new series of the same products. The new UITs had similar, if not the same, strategies and objectives as the old ones.
As an example, in 2016, Bowman advised a customer to buy a 2016 Q2 Series UIT containing a strategy of investing in dividend-paying technology companies. This UIT contained a two-year maturity. Bowman told the customer to sell it after a year and buy the 2017 Q2 Series UIT. FINRA states that the 2017 Q2 Series UIT was similar, if not the same, as the 2016 Q2 Series UIT. By acting on Bowman’s investment recommendations, the customer experienced unnecessary sales charges.
Bowman’s recommendations were inappropriate given the costs and frequency of these transactions. The regulator found that Bowman violated FINRA Rules 2010 and 2111 by making unsuitable UIT recommendations.
Bowman was registered with Sagepoint Financial between February 15, 2013, and August 6, 2021. He has also been employed by two different securities broker dealers who are defunct or expelled by securities regulators for violating federal securities laws or industry rules.
