Paul S. Plemenos of Sparta, New Jersey, a stockbroker with Merrill Lynch, Pierce, Fenner & Smith Incorporated, was fined $7,500.00 and suspended from associating with any Financial Industry Regulatory Authority (FINRA) member firm in any capacity after consenting to findings that he engaged in unauthorized trading in customer accounts. Letter of Acceptance, Waiver and Consent, No. 2015046190601 (July 22, 2016).
According to the AWC, between June of 2014 and May of 2015, at a time when Plemenos was associated with Merrill Lynch, he had effected an estimated sixty trades on a discretionary basis in five of the firm’s customer accounts. In these cases, Plemenos did not have the requisite written approval from such customers. Additionally, the AWC stated that Plemenos did not receive approval by Merrill Lynch for the customer accounts to be designated as discretionary.
The AWC further reported that in both 2014 and 2015, Plemenos falsified Merrill Lynch’s annual compliance questionnaire forms, in which he indicated that he never engaged in discretionary trading in the customer accounts. FINRA found that Plemenos’ unauthorized discretionary trading in addition to Plemenos’ false attestations to Merrill Lynch had consisted of conduct violative of FINRA Rules 2010 and NASD Rules 2510.
Public disclosure records via FINRA BrokerCheck reveal that Plemenos has been subject to four disclosure incidents. On May 2, 2003, Plemenos was named in a customer dispute in which a customer requested compensatory damages after alleging that Plemenos engaged in the unauthorized trading in the customer’s account.
On March 30, 2015, Plemenos settled a customer dispute for $60,600.00 after a customer alleged that Plemenos engaged in unsuitable, excessive, and unauthorized trading in the customer’s account. The customer also alleged that Plemenos charged the client fees that were excessive in such investment transactions.
Prior to Plemenos’ suspension, he was terminated by Merrill Lynch on June 11, 2015, amid allegations of engaging in unauthorized discretionary trading in customer accounts which the firm had deemed non-discretionary.
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