Peter Chris Marketos of Paramus New Jersey a stockbroker formerly employed by Oppenheimer Co Inc. and Raymond James Associates Inc. has been fined $20,000.00 and suspended for one year from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that (1) Marketos made unsuitable investment recommendations to customers regarding high-yield bonds and (2) Marketos made misleading statements to customers about the risks of those investments. Letter of Acceptance Waiver and Consent No. 2016049840101 (Dec. 18, 2018).
According to the AWC, between 2011 and November of 2015, Marketos inappropriately advised customers to invest approximately fifty to ninety percent of their assets in high-yield bonds.
The AWC stated that in one case, Marketos made recommendations for customer PB – a sixty-five-year-old semi-retired investor with a $200,000.00 net worth – to allocate assets in sub-investment grade corporate debt. Apparently, PB did not have experience investing in high yield or corporate bonds because he had invested his assets in real estate investment trust and mutual fund products. PB reportedly informed Marketos at the time PB established an investment account that PB was not able to handle taking any substantial loss.
The AWC stated that at certain times, between seventy percent and ninety-five percent of PB’s account had been invested in the high yield bonds. Moreover, approximately fifty-six percent to seventy percent of PB’s assets were concentrated in oil and gas companies, increasing PB’s risk of incurring losses. Evidently, between 2015 and 2016, several oil and gas company issuers filed for bankruptcy which led PB to incur drastic losses in his account.
The AWC revealed that in another case, customers SF and PF – a married, retired couple in their fifties with no experience investing in high yield or corporate bonds – were advised to place their assets in those investments. As was the case with PB, at certain times, up to ninety-five percent of SF’s and PF’s account had been concentrated in risky bond positions. Moreover, between one quarter and one-third of the bonds held by the married couple had been issued by oil and gas companies. As a result, SF and PF lost their principal investment in the bonds issued by those oil and gas companies.
FINRA found that Marketos’ recommendations were inappropriate for investors given their objectives for investing and tolerance for risk. Consequently, FINRA found Marketos’ conduct violative of FINRA Rules 2010, 2111 and National Association of Securities Dealers (NASD) Rule 2310.
The AWC further stated that Marketos made omissions and misrepresentations to customers concerning the high yield bonds. Particularly, Marketos indicated to SF that the bonds Marketos advised SF to purchase were guaranteed to provide SF and PF the return of their principal at maturity. Marketos also reportedly made misrepresentations about Oppenheimer’s classification of junk bonds including investment grade debt. Further, Marketos apparently made false statements to nearly two hundred customers about the federal funds rate. Consequently, FINRA found that Marketos’ conduct was violative of FINRA Rule 2010.
FINRA also cited Marketos as having made misleading statements to customers concerning bonds issued by Master Limited Partnerships concentrated in the oil and gas sector. Evidently, Marketos neglected to inform customers about the risks, and failed to provide investors with either a balanced and fair synopsis of risks pertaining to those investments or an adequate basis for customers to assess whether to invest in them. Marketos’ conduct was found by FINRA to be violative of FINRA Rules 2210 in this regard.
In addition, Marketos reportedly told nearly two-hundred investors about the annualized returns he expected to be produced by the bonds and Master Limited Partnership equity units. The e-mail evidently contained a comparison between two investments that omitted factors including guarantees, safety and liquidity. The AWC stated that in another e-mail, Marketos reportedly made baseless predictions concerning interest rate and equity volatility; stated that past returns of Master Limited Partnerships would repeat; and neglected to inform prospective investors that there were no guarantees with respect to the sustainability of Master Limited Partnership annual payouts. Thereafter, Marketos reportedly sent two hundred customers an e-mail in which he downplayed Master Limited Partnership and bond risks. FINRA found Marketos’ conduct violative of FINRA Rules 2010 and 2210.
Marketos’ registration with Oppenheimer Co. Inc. was terminated on October 2, 2014. Marketos was registered with Raymond James Associates Inc. between September 26, 2014 and May 2, 2016.
