James Brett Stuart, of Castle Rock, Colorado, a stockbroker and securities principal registered with Richfield Orion International Inc., is the subject of an enforcement action initiated by the Financial Industry Regulatory Authority (FINRA) in which the regulator is seeking sanctions against Stuart based upon allegations that Stuart failed to supervise certain representatives to ensure suitability of transactions in customer accounts and failed to appear for testimony as requested by FINRA. Department of Enforcement v. James Stuart, Complaint No. 2019062948102 (October 27, 2023).
FINRA Department of Enforcement alleges that between September 2018 and August 2021, Stuart, as the Chief Executive Officer, Chief Compliance Officer, and owner of Richfield Orion International Inc., did not create and enforce a supervisory system and written supervision procedures capable of complying with FINRA Rule 2111 and Regulation BI. Allegedly, the written procedures under Stuart’s responsibility did not adequately describe how to identify or respond to signs of potential excessive trading and did not take into account Regulation BI following its effective date in 2020.
Furthermore, Stuart is accused of failing to adequately supervise trading in two customers’ accounts. He did not review alerts indicating that these accounts were charged commissions equaling at least 30 percent of their value and did not investigate whether the frequent and costly trading was consistent with the customers’ investment profiles. The trading in these accounts purportedly resulted in losses collectively totaling $258,500.00. Department of Enforcement alleged that Stuart violated FINRA Rules 2010 and 3110 for failing to identify or reasonably respond to red flags of possible excessive trading.
Additionally, the Complaint alleged that Stuart failed to appear for testimony as part of FINRA’s investigation. He initially appeared for testimony on May 18, 2022, but requested a postponement before the testimony was complete. Despite subsequent requests by FINRA for Stuart to reappear and complete his testimony, he failed to do so. Therefore, the regulator alleged that he violated FINRA Rules 2010 and 8210.
Stuart was associated with Richfield Orion International Inc. in Castle Rock, Colorado from December 10, 2007, to November 3, 2022. FINRA expelled Richfield Orion International Inc. on February 16, 2023.
