Kurt Jason Gunter of Austin Texas a stockbroker formerly registered with Stifel Nicolaus Company Incorporated has been fined $10,000.00 and suspended from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity supported by findings that he made recommendations that were not suitable for Stifel Nicolaus customers as it pertained to unit investment trusts. Letter of Acceptance Waiver and Consent No. 2018057226601 (Nov. 20, 2020).
According to the AWC, between July of 2013 and December of 2016, customers were advised by Gunter to roll over their unit investment trust positions before those positions had matured. The stockbroker made these recommendations at least 270 times.
FINRA indicated that unit investment trusts generally have 24-month maturities and carry up to approximately four percent in sales charges, making these investments inappropriate for short-term trading. Those unit investment trusts maintained by Gunter’s customers had 24-month maturities but these investors liquidated or rolled over their positions after 297 days on average.
FINRA stated that 120 transactions effected by Gunter involved series-to-series rollovers in which one unit investment trust in the same series would be sold to purchase a newer unit investment trust in the same series. The AWC stated that the new unit investment trust contained similar or the same objectives as those unit investment trusts that customers were asked by Gunter to roll over.
In one case, FINRA stated that a unit investment trust held by a customer had contained an investment strategy of above average capital appreciation and a portfolio of stocks isBring FINRA Arbitration Claim Against by companies with strong market positions. The product had been sold after 76 days at Gunter’s direction. The customer’s funds were used for a purchase of another unit investment trust containing the same objectives and strategy. These types of recommendations were not appropriate according to FINRA given the cost and frequency of the transactions. Gunter violated FINRA Rules 2010 and 2111 in this respect.
Gunter also sent 96 unit investment trust switch letters to customers containing false information about the implications of unit investment trust rollovers. FINRA noted that costs were not specified in some cases. The AWC stated that 75 of the letters presented sales charges that were off by at least 25 percent. 21 of those letters failed to identify a sales charge pertaining to a new unit investment trust purchase. FINRA determined that Gunter’s inaccuracies had been violative of FINRA Rule 2010.
Gunter’s registration with Stifel Nicolaus was terminated on August 25, 2017. He has been registered with Wells Fargo Clearing Services since August 18, 2017.