Richard James Coleman (also known as Rich Coleman and as Rick Coleman) a stockbroker registered with SW Financial has been fined $15,000.00 and suspended for two years from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity founded on findings that (1) Coleman traded in customer accounts in excessive amounts and (2) Coleman mismarked customer order tickets. Letter of Acceptance Waiver and Consent No. 2017052699301 (Aug. 8, 2019).
According to the AWC, between October of 2015 and February of 2017, excessive trades had been placed by Coleman in the accounts belonging to customers, AE, TM, SB and JT at Legend Securities or SW Financial. The customers were advised by Coleman in regard to the trades in their accounts and Coleman controlled the trading in those accounts. However, FINRA revealed that the trades placed by Coleman had been quantitatively unsuitable given high cost-to-equity ratios and turnover rates. Coleman’s trading produced cost-to-equity ratios and turnover rates which far exceeded the thresholds used by FINRA in ascertaining excessive trading.
Trades placed by Coleman in AE’s account led to a 117.16 percent cost-to-equity ratio and 40.35 turnover rate, causing AE to pay $28,672.00 in fees or commissions while incurring $63,724 in losses. Coleman’s trading in TM’s account produced a 167.5 percent cost-to-equity ratio, a 35.81 turnover rate, $10,498.00 in fees or commissions, and $15,737.00 in losses for the customer. Coleman’s trading in SB’s accounts resulted in SB’s account having an 89.05 percent cost-to-equity ratio and 26.29 turnover rate, where SB had to pay $49,235.00 in fees or commissions while experiencing a $61,426.00 loss. Finally, as a result of Coleman’s trading in JT’s accounts, which generated a 210% cost-to-equity ratio and 71.14 turnover rate, JT paid $51,525.00 in fees or commissions but incurred $84,858.00 in losses. FINRA found that Coleman’s trading was violative of FINRA Rules 2010 and 2111.
While Coleman was associated with SW Financial, he also mismarked customer order tickets. The AWC stated that sale orders for customers AE, TM, JT and SB were mismarked by Coleman to make it appear that the transactions had not been solicited by him. Out of 136 sale orders which were executed by Coleman in these customers’ accounts, 113 had been falsely marked by him as unsolicited.
FINRA Public Disclosure confirms that Coleman is referenced in ten customer initiated investment related disputes pertaining to accusations of his violative conduct while employed with Rockwell Global Capital LLC, AF Financial Services Inc., New Castle Financial Services LLC, Benson York Group, Continental Broker Dealer Corp, Harrison Securities Inc. and Legend Securities. A customer filed an investment related complaint involving Coleman’s activities where the customer requested $70,000.00 in damages founded on allegations that unauthorized trades were effected in the customer’s account.
An additional customer initiated investment related complaint regarding Coleman’s activities was settled for $100,000.00 in damages based upon accusations that the customer sustained unwarranted poor performance on over-the-counter equities trades placed in the customer’s account. Another customer initiated investment related arbitration claim concerning Coleman’s conduct was resolved for $25,000.00 in damages supported by allegations that over-the-counter equities trades had been executed in the customer’s account in an excessive manner, and the equities trades failed to be suitable for the customer.
Another customer initiated investment related complaint concerning Coleman’s activities was settled for $210,000.00 in damages founded on accusations that the customer had been placed into stock and over-the-counter equities that were in no way suitable for the customer. Coleman is also is referenced in a customer initiated investment related arbitration claim in which the customer sought $85,000.00 in damages based upon allegations that while Coleman was associated with Legend Securities Inc., transactions executed in the customer’s account had not been suitable for the customer; fiduciary duties were breached; trades had been effected without the customer’s permission; contractual obligations were violated; the customer’s account had been handled in a negligent manner; and transactions were fraudulently effected. FINRA Arbitration No. 19-00102 (Jan. 11, 2019).
Coleman’s employment with SW Financial has been terminated as of March 14, 2019. He has been employed by twenty different broker dealers, seventeen of which have been expelled by securities regulators for violation of federal securities laws or are otherwise defunct.
