James D. Maendel, of Farmington Hills, Michigan, a stockbroker formerly registered with LPL Financial LLC, has been fined $10,000.00 and suspended from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that he made misstatements on switch forms that were used to effect unit investment trust transactions. Letter of Acceptance, Waiver and Consent, No. 2015044365601 (July 18, 2017).
According to the AWC, from December of 2012 and January of 2015, incorrect records were provided by Maendel to his firm to effect forty-eight transactions involving the replacement of an existing unit investment trust, mutual fund, non-traded real estate investment trust, or structured investment. The firm’s supervisory protocols in this regard necessitated an Investment Switch Disclosure Form to be completed, wherein the investment advantage of the transaction was to be stated by Maendel in each case.
The AWC revealed that the switch forms that Maendel provided contained information about the costs of transacting that were false and which had been based upon his faulty assumptions. Apparently Maendel used verbal statements from sellers instead of prospectuses to confirm pricing. Moreover, Maendel reportedly overlooked data about customer’s deferred sales charges regarding existing products, resulting in customers not having accurate information about the true costs of moving from one investment to another.
FINRA also indicated that in eleven circumstances, trades were marked as not having been solicited by Maendel when they had been solicited. In that regard, Maendel speciously determined that trades were not solicited if customers did not have significant input or if they contacted Maendel concerning possible investments that resulted in a later recommendation. FINRA found Maendel’s conduct to be violative of FINRA Rules 2010 and 4511.
Maendel was fired by LPL Financial LLC on January 7, 2015, based upon allegations that he traded unit investment trusts on a short-term basis and did not provide disclosures to his firm that were accurate in regard to transactions effected in customer accounts. Maendel was also terminated from UBS Financial Services Inc. on September 30, 2010, following the firm’s internal investigation into allegations that he mismarked trade orders and made unsuitable investment recommendations to customers.
FINRA Public Disclosure additionally reveals that Maendel has been identified in two customer initiated investment related disputes containing allegations of his misconduct while employed with Comerica Securities and UBS Financial Services, Inc., where customers collectively sought $50,000.00 in damages based upon allegations that Maendel, inter alia, made faulty investment recommendations regarding investments in mutual funds and over-the-counter equities.
Maendel has been registered with L.M. Kohn & Company since August 6, 2015.
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