Tom Puentes, of Langley, Washington, a stockbroker formerly registered with Morgan Stanley, was fined $15,000.00 and suspended from associating with any Financial Industry Regulatory Authority (FINRA) member firm in any capacity after consenting to findings that he effected discretionary trades in customer accounts without authorization. Letter of Acceptance, Waiver and Consent, No. 2014042676301 (Oct. 13, 2016).
According to the AWC, between 2010 and 2013, while Puentes was registered with Morgan Stanley as both a securities sales supervisor and registered stockbroker, he utilized price and time based discretion in fourteen customer accounts concerning the purchase of municipal bonds on an estimated two-hundred and twenty circumstances.
The AWC stated that Morgan Stanley did not allow for the firm’s registered representatives, which included Puentes, to effect trades on a discretionary basis, absent authorization provided from both the firm as well as the customer prior to engaging in such. The firm’s restriction reportedly included trading with price and time based discretion. The AWC stated that Puentes did not follow his firm’s policies, in that he failed to obtain the requisite authorization from fourteen of the firm’s customers prior to effecting the municipal bonds purchases.
The AWC additionally stated that Morgan Stanley was never notified by Puentes concerning the aforementioned trades upon his firm’s questioning of him in this regard via the firm’s 2010 – 2013 compliance questionnaires. Specifically, Puentes indicated that he had not ever traded in accounts on a discretionary basis in each of the compliance questionnaires that were administered to him annually. FINRA found that Puentes’ conduct was violative of MSRB Rule G-17.
FINRA Public Disclosure reveals that Puentes has been subject to a twenty three disclosable events concerning misconduct. Particularly, on September 13, 2000, he was named in a customer initiated investment related arbitration claim containing allegations that Puentes made unauthorized and inappropriate bond purchases in the customer’s margin account despite lacking requisite authorization, and traded excessively in the customer’s account.
On March 12, 2014, Puentes settled a customer initiated investment related arbitration claim for $35,000.00 in damages based upon allegations that Puentes effected bond purchases in the customer’s account without authorization. On January 16, 2015, Puentes settled a customer initiated investment related arbitration claim for $99,000.00 in damages based upon allegations that Puentes made unsuitable and unauthorized purchases of bonds in the customer’s account.
Between March 24, 2015, and July 1, 2015, Puentes became subject to six additional customer initiated investment related arbitration claims which he settled for $339,5000.00 in the aggregate based upon allegations that Puentes effected unsuitable purchases in the customers’ investment accounts. From August 10, 2015, though February 18, 2016, Puentes settled seven additional customer initiated investment related arbitration claims for $319,200.00 in the aggregate based upon allegations that Puentes effected unauthorized purchases of Puerto Rico municipal bonds in customer accounts.
The AWC reveals that Puentes was terminated from Morgan Stanley on October 30, 2014, based upon allegations concerning his aforementioned unauthorized discretionary municipal bond trading. Puentes has since been registered with Kestra Investment Services, LLC, from December of 2014.
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