Jason N. Anderson of Beaumont Texas a stockbroker formerly registered with LPL Financial LLC has been suspended for three months from being an investment adviser representative in the State of Texas according to a Disciplinary Order issued by the Texas State Securities Board Order containing findings that Andersons provided investors with investment recommendations that were not suitable given the costs incurred by investors whose funds were subject of Anderson’s investment strategy. In the Matter of the Investment Adviser Registration of Jason N. Anderson Order No. REG18-SUS-01 (Jan. 23, 2018).
According to the Order, an active trading strategy called Equity Strategy had been implemented by Anderson during the time that he was employed by LPL Financial LLC. Supposedly, as part of this Equity Strategy, individual stock would be purchased and sold in customer accounts by Anderson depending on Anderson’s assessment of the difference between the historical prices of stocks and their current prices.
The Order stated that investors with a moderate tolerance for risk and growth related objectives for investing had been steered by Anderson towards placing funds in the Equity Strategy. Evidently, a large portion of the customers’ investable assets had been directed to mutual funds as a result of Anderson’s recommendations.
Evidently; however, trading costs were not factored into Anderson’s analysis and suitability determinations. Particularly, Anderson did not factor in the commissions that he would earn on the transactions he placed in customers’ accounts. Consequently, Anderson failed to determine the types of returns investors would need to generate to offset their overall costs. The Order noted that in one case, the overall charges equated to approximately thirty percent of the value of the customer’s securities portfolio, causing the customer to have to generate an exceptional return on the customer’s investments in order to avoid taking a loss. The Texas State Securities Board concluded that Anderson’s unsuitable recommendations constituted inequitable securities practices violative of Texas Securities Act.
This is not the first time that Anderson has been suspended by a securities regulator for misconduct in the securities industry. In particular, has been suspended from associating with any FINRA member in any capacity based upon allegations that Anderson failed to comply with the terms of FINRA Arbitration No. 17-0033. Case NO. 2017055025701 (Oct. 13, 2017).
FINRA Public Disclosure reveals that Anderson is referenced in two customer initiated investment related disputes pertaining to accusations of Anderson’s misconduct during the time that he was associated with LPL Financial LLC. In particular, a customer initiated investment related civil action brought in the Texas District Court of Jefferson County Texas which involved Anderson’s activities was settled for $410,000.00 in damages supported by allegations that between April 2007 and January of 2016, Anderson mishandled the customer’s investment accounts, churned the customer’s investment portfolio, and effected trades in the customer’s account without the customer’s authorization. Case No. A-199270 (May 23, 2018).
Thereafter, a customer filed an investment related arbitration claim regarding Anderson’s activities in which the customer sought damages estimated to exceed $5,000.00 founded on accusations that the customer was given bad advice concerning stock trades placed in the customer’s account; trades were placed in the customer’s account without the customer having provided Anderson any permission; and the customer’s equity investments had been churned by Anderson. FINRA Arbitration No. 18-03929 (Nov. 14, 2018).
Anderson was discharged by LPL Financial LLC on January 22, 2016 based upon allegations of him exercising discretion in a customer’s account contrary to the firm’s policies. Anderson was later employed by Kovack Securities Inc.; however, he was discharged on May 12, 2016 supported by accusations of him possessing signed but otherwise blank customer account documents.
