A clerk counts US dollar bills at a bank

Lina Maria Garcia, of Miami Florida, a stockbroker formerly registered with Insigneo Securities LLC is the subject of a customer initiated investment related Financial Industry Regulatory Authority (FINRA) securities arbitration claim in which the customer requested compensatory damages based upon allegations that Garcia overconcentrated the investor’s accounts in speculative securities and made unsuitable investment recommendations. Additionally, Garcia was accused of engaging in a cherry-picking scheme, wherein she favored other customer accounts over the investor’s accounts, particularly with stocks, while Garcia was associated with Insigneo Securities LLC. FINRA Arbitration No. 23-00832 (April 17, 2023).

FINRA Public Disclosure shows that Garcia was suspended for 12 months by United States Securities and Exchange Commission (SEC) because Garcia violated Securities Act of 1933 Section 17(a)(3) and Investment Advisers Act of 1940 Section 206(2). In addition to the suspension, Garcia was held liable for disgorgement of $225,718.00 and fined $100,000.00. This came after a final judgment where Garcia was permanently enjoined from committing violations of Securities Exchange Act of 1934 Section 10(b), Securities Act of 1933 Section 17(a)(3), and Investment Advisers Act Section 206(2) because of her oversight role in a cherry-picking scheme. Securities and Exchange Commission v. Ramiro Jose Sugranes, et al., Civil Action Number 21-cv-22152, in the United States District Court for the Southern District of Florida.

During the cherry-picking scheme that lasted more than four years, thousands of profitable trades of securities worth more than $4 million were allocated to two preferred accounts. In addition, millions of dollars of unprofitable trades of securities were allocated to other investment advisory client accounts. In the Matter of Lina Maria Garcia,  Administrative Proceeding File No. 3-21218 (October 24, 2022).

According to the complaint filed by SEC, Garcia, alongside Ramiro Jose Sugranes and other defendants, conducted fraudulent trade allocations. This scheme involved manipulating the allocation of trades to benefit certain preferred accounts, resulting in significant profits for these accounts at the expense of other, non-preferred customer accounts.

The cherry-picking primarily concerned stocks and options, where profitable trades amounting to more than $4,000,000.00 were consistently allocated to the preferred accounts of Sugranes’ parents. But positions that depreciated in value within the same day were allocated to other customers, who consequently faced substantial first-day losses.