Joseph R. Daigneault of Biddeford, Maine, a stockbroker with Investors Capital Corp., was fined $10,000 and suspended from associating with any Financial Industry Regulatory Authority (FINRA) member firm in any capacity for twenty days after consenting to findings that he had provided customers with consolidated statements that contained misleading and inaccurate information regarding customers’ financial holdings. Letter of Acceptance, Waiver and Consent, No. 2013038133001 (Oct. 23, 2015).
According to the AWC, from October 2005 through September 2013, Daigneault had provided consolidated statements to at least eight customers that contained misleading and inaccurate information regarding customers’ financial holdings. The AWC indicated that Daigneault had manually created the consolidated statements by using a spreadsheet program. Most of the statements that Daigneault created included values for non-traded, illiquid assets, where Daigneault would provide his customers’ the value of their initial investment (as opposed to more realistic values).
Further, Daigneault also provided customers’ statements that contained a “death benefit” column containing investment values that were listed, despite the fact that the securities did not actually have death benefits. As a result, FINRA found Daigneault’s conduct violated NASD Conduct Rules 2210(d) and 2110 and FINRA Rules 2210(d) and 2010.
Consolidated reports are documents provided by a broker to a customer that combines account information pertaining to most or all of the customer’s assets. They are designed to supplement, rather than replace, the customer account statements per NASD Rule 2340. FINRA’s Notice 10-19 specifically instructs firms consolidated reports must be clear, accurate, and compliant with federal securities laws and FINRA laws. FINRA clearly warns that any firm which cannot adequate supervisory the consolidated reports prepared by its Stockbrokers must prohibit dissemination of such reports and take appropriate steps to ensure the Stockbrokers comply with the prohibition.
Firms and individuals, not surprisingly, are prohibited from unauthorized use of customer funds, borrowing of a customer’s securities or funds, forgery, non-disclosures or misstatements of material facts, and various deceptions and manipulations. Such conduct can also be found to violate criminal and other civil laws, and be subject to sanction from the federal and state government bodies.
Public disclosure records via FINRA’s BrokerCheck reveal that Daigneault is subject to a customer dispute (pending) from May 7, 2015, where a customer is requesting $1,000,000.00 after disputing the suitability of alternative investments purchased.
Guiliano Law Group
If you have been the victim of securities fraud and you have a complaint, you should consult with an attorney. The practice of Nicholas J. Guiliano, Esquire, and The Guiliano Law Group, P.C., is limited to the representation of investors in claims for fraud in connection with the sale of securities, the sale or recommendation of excessively risky or unsuitable securities, breach of fiduciary duty, and the failure to supervise. We accept representation on a contingent fee basis, meaning there is no cost unless we make a recovery for you, and there is never any charge for a consultation or an evaluation of your claim. For more information contact us at (877) SEC-ATTY.