Elaine D. LaCerte, of Colorado Springs, Colorado, a stockbroker formerly registered with Morgan Stanley, has been fined $5,000.00 and suspended for six months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that she pursued a unit investment trust trading strategy that was unsuitable for customers. Letter of Acceptance, Waiver and Consent, No. 20160513672-01 (Aug. 29, 2017).
According to the AWC, LaCerte implemented a strategy to trade unit investment trusts on a short-term basis in one-hundred and seven customer investment accounts. LaCerte reportedly made recommendations for customers to buy and sell unit investment trusts before the products matured. The AWC indicated that most of the unit investment trust products subject of LaCerte’s recommendations contained at least two-year maturities, with sales charges ranging from approximately two to four percent.
Notwithstanding the two-year maturities, LaCerte purportedly made recommendations for the customers’ unit investment trust positions to be sold after they were held for just three-hundred days on average. Further, the AWC revealed that LaCerte recommended in at least one-hundred cases that customers utilize the unit investment trust sale proceeds for purchase of other unit investment trusts that contained the same objectives for investing. LaCerte’s short-term trading recommendations evidently resulted in undue sales loads to be incurred by customers. FINRA found that LaCerte made unsuitable investment recommendations due to the volume and costs associated with her trading scheme; conduct violative of FINRA Rules 2010, 2111 and NASD Rule 2310.
FINRA Public Disclosure reveals that LaCerte has been subject of five customer initiated investment related disputes containing accusations of her transgressions while employed with Morgan Stanley. Particularly, on October 8, 2014, a customer filed an investment related written complaint involving LaCerte’s conduct founded on allegations that LaCerte made faulty assurances regarding the customer’s projected maturity value on unit investment trust investments.
On August 23, 2016, another customer initiated investment related complaint regarding LaCerte’s activities had been resolved for $24,464.76 in damages grounded by accusations that from November of 2014 to July of 2016, LaCerte effected unit investment trust transactions in the customer’s account that were not suitable. Thereafter, on August 29, 2016, a customer initiated investment related written complaint pertaining to LaCerte’s activities was resolved for $4,000.00 in damages based upon accusations that LaCerte made misrepresentations to the customer concerning the risks of investing in unit investment trust products.
Subsequently, on November 30, 2016, a customer filed an investment related written complaint regarding LaCerte’s activities, supported by allegations against LaCerte of placing unsuitable trades in the customer’s account. Further, LaCerte is the subject of a customer initiated investment related arbitration claim on June 15, 2017, in which the customer sought $68,861.93 in damages founded on allegations that LaCerte induced the customer’s municipal bond purchase by making misrepresentations.
LaCerte’s registration with Morgan Stanley was terminated on August 11, 2016.
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