Robert P. Lappin, of Las Vegas, Nevada, a stockbroker formerly associated with New England Securities, was fined $5,000.00 and suspended from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity after consenting to findings that he made unsuitable recommendations to customers regarding unit investment trusts. Letter of Acceptance, Waiver and Consent, No. 2015044783402 (Oct. 13, 2016).
According to the AWC, from October of 2012 through April of 2014, while Lappin was associated with New England Securities, he made recommendations to customers that were not suitable, and facilitated twenty-two transactions involving unit investment trusts in five of his firm customers’ accounts. According to FINRA, Lappin did not have an adequate basis for concluding that such transactions were suitable when considering the costs associated with the transactions, the rate in which the transactions had occurred, and the overall purpose of the transactions.
The AWC stated that such investments, which generally require extended holding periods to be deemed suitable, were only held by Lappin’s customers for one-hundred and one days. FINRA found that the shorter holding periods led customers to bear losses and unwarranted sales fees. Ultimately, FINRA found that Lappin’s conduct was violative of FINRA Rules 2111 and 2010. Lappin was ordered to pay $26,823.96 to affected customers due to his unsuitable investment recommendations.
FINRA Public Disclosure reveals that prior to FINRA’s disciplinary action against Lappin, he was named in five customer initiated investment related arbitration claims. Particularly, on January 4, 2012, Lappin settled a customer initiated investment related arbitration claim for $150,000.00 based upon allegations by customers of making investment recommendations that were not suitable.
On July 1, 2009, Lappin settled a customer initiated investment related arbitration claim for $206,000.00 based upon allegations against him of making unauthorized trades on a discretionary basis, excessively trading in the customer’s account, making misrepresentations to the customer, and effecting an investment strategy that was unsuitable. On February 2, 2006, Lappin settled a customer initiated investment related arbitration claim for $9,500.00 based upon allegations that he was responsible for the customer’s investment poor investment performance.
On December 14, 1998, Lappin was named in a customer initiated investment related arbitration claim, in which he was alleged to have made misrepresentations to the customer and responsible for the customer’s losses in equity investments. On August 8, 1995, Lappin was named in a customer initiated investment related arbitration claim in which the customer was awarded $37,198.00 in damages based upon allegation that Lappin improperly used discretion in the customer’s account, effected unsuitable transactions, and excessively traded in the customer’s account.
After Lappin was terminated from New England Securities in January of 2015, he became registered with Metlife Securities, Inc. from January through February of 2015. Lappin is not currently registered with any FINRA member firm.
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