Lawrence John Fawcett Jr., of Farmingdale, New York, a stockbroker registered with Salomon Whitney Financial, has been fined $2,500.00 and suspended from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity by consenting to findings that he made an unsuitable investment recommendation to a customer. Letter of Acceptance, Waiver and Consent, No. 2015043939101 (Dec. 18, 2017).
According to the AWC, in April of 2015, during the time that Fawcett was associated with Salomon Whitney Financial, customer HR established an individual retirement account through him. Apparently, the customer provided new account documentation, indicating that the customer’s investment horizon spanned one to three years, and his objective was to preserve capital in anticipation of HR’s upcoming retirement.
The AWC revealed that in May of 2015, HR transferred class A mutual fund holdings from another institution into HR’s individual retirement account. Evidently, those mutual fund assets were all part of the same family of mutual funds. However, recommendations had been made by Fawcett just three days later for HR’s class A mutual fund positions to be sold, with proceeds of $865,000.00 to be used to buy fourteen new mutual funds spread across twelve separate families.
FINRA concluded that recommendations made by Fawcett were not suitable for the customer based upon the objectives of the mutual funds he recommended consisting of total return, capital growth or capital appreciation instead of the objectives of capital preservation that HR relayed to Fawcett. Additionally, the AWC stated that the class A shares that Fawcett recommended were not appropriate for HR based upon those new mutual funds being appropriate for investors with longer investment horizons than the investment horizon HR communicated. Moreover, Fawcett prevented HR from benefiting from the available breakpoint discounts through spreading HR’s purchases across the twelve fund families. FINRA found that Fawcett’s activities in this respect were violative of FINRA Rules 2010 and 2111.
FINRA Public Disclosure reveals that Fawcett has been identified in three customer initiated investment related disputes containing allegations of Fawcett’s improper conduct during the time he was associated with Rockwell Global Capital, LLC and Salomon Whitney Financial. Specifically, on April 9, 2013, a customer filed an investment related written complaint involving Fawcett’s conduct, where the customer requested $7,912.23 in damages supported by accusations of unauthorized over-the-counter equity trading in the customer’s account.
Subsequently, a customer was awarded $30,000.00 in damages according to an investment related arbitration claim involving Fawcett’s wrongdoing containing findings that Fawcett utilized the customer’s margin without authorization, and placed stock and over-the-counter equity trades in the customer’s account without the customer’s consent. FINRA Arbitration No. 15-00570 (Aug. 15, 2016).
Thereafter, a customer filed an investment related written complaint involving Fawcett’s conduct, in which the customer requested $20,000.00 in damages based upon allegations that Fawcett executed unapproved over-the-counter equity transactions in the customer’s account. FINRA Arbitration No. 17-00781 (Apr. 7, 2017).
Fawcett’s registration with Salomon Whitney Financial was terminated as of June 29, 2015. Since June 26, 2015, he has been associated with Westpark Capital, Inc.
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