Edward T. McFarlane, of Jenkintown, Pennsylvania, a stockbroker formerly registered with Oppenheimer & Co. Inc., has been fined $5,000.00 and suspended for two months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that he effected non-traditional exchange traded fund trades which were not suitable for customers. Letter of Acceptance, Waiver and Consent, No. 2016050393901ne 18, 2017).
According to the AWC, between December of 2010 and June of 2012, one-hundred and sixty-nine trades were recommended and ultimately placed by McFarlane in a customer’s accounts involving leveraged, inverse, and inverse-leveraged exchange traded funds. The AWC stated that the non-traditional ETFs were not suitable for the customer considering the customer’s financial profile, risk tolerance and conservative objectives for investing.
Apparently, non-traditional exchange traded funds were held by McFarlane for forty days on average. The AWC revealed that at least one non-traditional exchange traded fund was held in the customer’s account for four-hundred and seventy days. The AWC indicated that McFarlane’s prolonged holding periods in the customer’s accounts were inconsistent with the funds’ short-term objectives, and exposed the customer to $48,524.79 in losses. Consequently, FINRA found that McFarlane’s conduct was violative of FINRA Rule 2010 and NASD Rule 2310.
FINRA Public Disclosure reveals that on January 23, 2008, a customer filed an investment related written complaint involving McFarlane’s conduct, in which the customer requested $15,000.00 in damages founded on allegations that McFarlane churned the customer’s portfolio and made misrepresentations concerning mutual fund investments effected in the customer’s account.
McFarlane was fired by Oppenheimer & Co. Inc. on February 13, 2017, supported by allegations that he communicated with customers without approval from the firm’s managerial personnel. Since February 21, 2017, he has been registered with International Assets Advisory, LLC.
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