James Flower, of Melville, New York, a stockbroker formerly registered with Global Arena Capital Corp., has been suspended for three months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that he effected unsuitable exchange traded notes recommendations to customers. Letter of Acceptance, Waiver and Consent, No. 2014040644001 (June 12, 2017).
According to the AWC, recommendations of iPath S&P 500 VIX Short Term Futures Exchange Traded Note (VXX) were made by Flower to thirteen of the firm’s customers in 2013 and 2014, even though Flower lacked an adequate foundation to conclude that his recommendations were appropriate. Particularly, the investments in VXX were reportedly perceived by Flower as countering the S&P 500 Index, causing him to make recommendations for customers to hold their VXX positions as a hedge against market volatility.
Customers reportedly pursued fifty-eight purchases and thirty-nine sales of VXX from February of 2013 to March of 2014 based on recommendations made by Flower, which caused customers to sustain more than $249,000.00 in losses. FINRA found that Flower’s failure to comprehend the volatile exchange trade note precluded him from making appropriate recommendations to customers; conduct violative of FINRA Rules 2010 and 2111.
Financial Industry Regulatory Authority (FINRA) Public Disclosure reveals that on June 17, 2011, a customer initiated investment related arbitration claim involving Flower’s conduct was settled for $67,500.00 in damages based upon allegations that Flower, while associated with Prestige Financial Center, Inc., induced the customer’s purchases of exchange traded funds by making misrepresentations, failed to apprise the customer about margin use, and failed to execute the customer’s stop loss order. Moreover, on November 12, 2015, a customer initiated investment related written complaint regarding Flower’s activities was resolved for $45,000.00 in damages based upon allegations that he effected unsuitable stock transactions and churned the customer’s investment portfolio.
Flower became associated with SW Financial on December 1, 2015. Since May 9, 2014, he has been associated with sixteen different broker dealers, fifteen of which have been expelled by securities regulators for violation of federal securities laws or are otherwise defunct. #cockroach
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