Charles Matthew Anderson, of Doylestown, Pennsylvania, a stockbroker registered with Morgan Stanley, has been fined $5,000.00 and suspended for four months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity by consenting to findings that he traded unit investment trusts in customer accounts that were not suitable for customers. Letter of Acceptance, Waiver and Consent, No. 20160518296-01 (Nov. 30, 2017).
According to the AWC, Anderson persistently recommended that unit investment trust transactions be effected in at least one-hundred and sixteen accounts owned by customers, where Anderson would advise the customers to sell their positions prior to the maturities of the unit investment trust products. Apparently, most of the unit investment trust products contained twenty-four-month maturity dates, and carried sales charges from 1.95% to as high as 3.95%.
Evidently, customers received recommendations to sell unit investment trust positions held in their accounts in under one year from the point of buying them; the investments were held for just over two hundred days on average. Further, in at least twenty-six circumstances, recommendations were made by Anderson for customers to sell unit investment trusts after holding them for a short period, where he would then recommend that other unit investment trusts containing the same investment objectives be purchased.
FINRA concluded that Anderson’s investment recommendations led customers to pay unreasonable sales fees, deeming the transactions as not having been suitable for customers according to the cost and frequency in which transactions had been effected. Consequently, FINRA found that Anderson’s conduct was violative of FINRA Rules 2010 and 2111 as well as NASD Rule 2310.
FINRA Public Disclosure confirms that a customer initiated investment related arbitration claim involving Anderson’s conduct was settled for $135,000.00 in damages supported by accusations that Anderson made unsuitable equity recommendations to customers. National Association of Securities Dealers Arbitration No. 01-06224 (Oct. 28, 2002).
Anderson was fired from Morgan Stanley on June 23, 2016, based upon allegations of improper conduct relating to confirmation of trades and unit investment trust trading activity. Between August 29, 2016, and September 7, 2017, Anderson was registered with Purshe Kaplan Sterling Investments.
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