Jeffrey Duane Jacobson of Minneapolis Minnesota a stockbroker formerly employed by Dougherty Company LLC has been fined $7,500.00 and suspended from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that Jacobson failed to supervise a registered representative that executed unsuitable investment transactions in a customer’s investment account. Letter of Acceptance Waiver and Consent No. 2015047008702 (Oct. 18, 2016).
According to the AWC, trades for senior customers had been effected by a top stockbroker of Dougherty Company LLC without the broker having spoken with customers on the days that the transactions were effected in their accounts. The AWC stated that the stockbroker executed unsuitable short-term trades of municipal bonds and corporate bonds in the customers’ accounts. Moreover, the AWC indicated that margin had been inappropriately utilized by the broker to effect several dozen securities transactions in their accounts.
Our investigation of this matter reveals that the subject individual was Jeffrey A. Hill. Hill was associated with Dougherty from 2003 to June 2014.
In a separate action against Hill, FINRA found that:
From January 2010 to June 2014, Hill initiated hundreds oftrades fortwo elderly customers without contacting them approximately half ofthe time, and recommended or engaged in dozens oftransactions that were qualitatively or quantitatively unsuitable or lacked a reasonable basis, including short-term trading ofcorporate and municipal bonds.
Evidently, Jacobson was the main person tasked with supervising the trading activities of the broker. The AWC stated that there were red flags concerning the broker’s trading activities that Jacobson never examined. Particularly, the broker reportedly effected an abnormally large amount of trades in the customers’ accounts which produced an exception report for Jacobson to review. Apparently, Jacobson never corresponded with any of the customers whose accounts were listed in the exception reports.
Rather, Jacobson reportedly depended on the customer’s receipt and review of an activity letter that FINRA claimed to be insufficient in detailing the activities of the stockbroker in the customer’s account. Additionally, the customer was apparently left without any information about concerns of the firm relating to the customer’s account which served the basis of the letter being sent to the customer in the first place. The AWC also stated that Jacobson never contacted any other Dougherty Company supervisors to discuss the nature of the brokers trades to determine if they were unsuitable for customers.
Consequently, FINRA stated that Jacobson’s failure to supervise the brokers trading in customer accounts was violative of FINRA Rule 2010 and National Association of Securities Dealers (NASD) Rule 3010.
Jacobson has been registered with Dougherty Company LLC since December 9, 2002.
