Steve Dale Heath, of Newport News, Virginia, a stockbroker formerly registered with LPL Financial, LLC, has been fined $5,000.00 and suspended from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that he effected trades in a customer’s account on an unsuitable and unauthorized basis. Letter of Acceptance, Waiver and Consent, No. 2014042674201 (Jan. 25, 2017).
According to the AWC, from May of 2011 to June of 2014, class A shares of mutual funds were recommended by Heath to a senior customer, NF, as part of a short-term trading strategy. Heath reportedly made recommendations for NF to sell mutual funds positions after holding them for two-hundred and forty-nine days on average, even though the mutual funds were designed for longer holding periods. Apparently, the proceeds were then utilized by Heath in order to effect additional purchases of the same share class.
The AWC stated that NF ultimately sustained $7,207.00 in investment losses due to Heath’s trading. FINRA found that Heath lacked an adequate basis for concluding that his recommended trades were appropriate. Therefore, FINRA held that Heath’s conduct was violative of FINRA Rules 2111 and 2010, as well as NASD Conduct Rule 2310.
Further, from May of 2011 to June of 2014, seventeen trades had been effected by Heath in the investment accounts of NF on a discretionary basis; however, the transactions had not been approved of in writing by NF prior to Heath effecting them. Moreover, LPL Financial did not deem NF’s accounts as approved for purposes of discretionary trading. Heath’s conduct in this regard was held by FINRA to be violative of FINRA Rule 2010 and NASD Conduct Rule 2510(b).
FINRA Public Disclosure reveals that on August 20, 2014, Heath was terminated by Statos Wealth Partners and LPL Financial LLC based upon allegations that Heath’s discretionary trading had violated the policies of the firm. Following Heath’s termination from LPL Financial, LLC, he became registered with Securities Management, Inc. from October 21, 2014, to December 31, 2016.
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