Caroline Faye Korn of Rochester New York is a stockbroker registered with Pinnacle Investments LLC who has been disgorged of seven thousand three hundred dollars in commissions and suspended for four months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that she effected unauthorized transactions in customer accounts and made unsuitable investment recommendations to customers. Letter of Acceptance Waiver and Consent No. 2014040676701 (Feb. 16 2018).
According to the AWC, from March of 2013 to March of 2014, Korn executed short-term trading of class A mutual funds in accounts owned by six customers despite the transactions having been unsuitable for the customers. The AWC indicated that Korn failed to consider that class A mutual funds were designed for long-term holding periods based upon the up-front sales costs associated with them.
Korn reportedly made recommendations for customers to buy class A mutual fund shares and then sell their positions less than a year after being purchased. Apparently, customers maintained class A mutual fund share positions for under four months on average. Consequently, at least five of the firm’s customers collectively incurred $30,254.00 in losses, during which time Korn accumulated commissions totaling $7,300.00. FINRA found Korn’s unsuitable investment recommendations to be violative of FINRA Rules 2010 and 2111.
The AWC additionally revealed that Korn was fined $5,000.00 and suspended by FINRA in all capacities based upon consenting to findings that she violated FINRA Rules 2010 and National Association of Securities Dealers (NASD) Rule 2510 by effecting unauthorized transactions in eleven customers’ accounts while associated with Brighton Securities Corp. Letter of Acceptance, Waiver and Consent, No. 2011029070101 (Oct. 22, 2012). Korn was reportedly placed on heightened supervision by Brighton Securities Corp. at the time she returned in March of 2013, in which she was disallowed from engaging in discretionary trading. Despite this, Korn effected trades on a discretionary basis in Brighton Securities Corp. customer accounts from March of 2013 to March of 2014. Brighton Securities Corp. evidently fired Korn on March 24, 2014, based upon allegations of her excessive trading in customer accounts.
Then, from April of 2014 to April of 2015, during which time Korn was associated with Pinnacle Investments, LLC, she exercised discretion in customer accounts. Korn reportedly effected unauthorized trades in accounts owned by fourteen Brighton and Pinnacle customers. Korn’s employing firms neither permitted those accounts to be approved for discretionary trading nor did customers ever furnish written consent for discretion to be exercised. FINRA found that Korn’s conduct was violative of FINRA Rule 2010 and NASD Rule 2510.
FINRA Public Disclosure confirms that Korn is referenced in three customer initiated investment related disputes that pertain to accusations of Korn’s misconduct while employed with Brighton Securities Corp. Particularly, a customer initiated investment related arbitration claim involving Korn’s conduct was settled for $105,000.00 in damages supported by allegations that Korn accumulated excessive commissions from the customer, made unsuitable investment recommendations, and churned the customer’s mutual fund, stock and corporate debt portfolio. FINRA Arbitration No. 15-01991 (Mar. 7, 2016).
Additionally, on March 7, 2016, a customer initiated investment related written complaint regarding Korn’s activities was resolved for $15,500.00 in damages founded on accusations that Korn’s stock recommendations to the customer were not suitable because they conflicted with the customer’s objectives for investing. Another customer initiated investment related written complaint involving Korn’s conduct was settled on March 7, 2016 for $22,500 in damages based upon allegations of excessive commissions, excessive trading, and poor recommendations concerning penny stock, mutual fund, money market fund, equity and direct investment products.
Korn has been registered with Pinnacle Investments, LLC since April 23, 2014.
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