Brian Joseph Panfil of New Woodstock, New York, a stockbroker formerly registered with Ridgeway & Conger, Inc., has been charged by Financial Industry Regulatory Authority Department of Enforcement in a Complaint alleging that he effected unsuitable trades in customer accounts, forged signatures of customers on account documentation, and placed trades without authorization. Department of Enforcement v. Brian Joseph Panfil, No. 2015045549301 (Nov. 20, 2017).
According to the Complaint, from April of 2012 to March of 2015, Panfil effected a short-term trading strategy involving the switching of mutual fund investments in the accounts of customers TSE, NB, DQB, and DS. The Complaint stated that class A shares of mutual funds had been recommended to customers or effected in the customers’ accounts, only to be sold within two-to-three months after the transactions were consummated. The Complaint alleged that twenty-four switches of mutual funds were executed, which caused customers to pay $27,924.00 in excess sales charges compared with investors holding the positions in mutual funds or moving to a new fund within the same family of funds.
The Complaint stated that Panfil’s recommendations to switch the mutual funds was not suitable for the customers as they failed to be consistent with the longer-term investment horizon expected for class A shares of mutual funds that customers maintained within their investment portfolios. The Complaint also stated that the recommendations were inappropriate based upon the unnecessary sales loads and charges that customers incurred – the majority of which went to Panfil.
Apparently, Panfil only made recommendations for customers to buy class A mutual fund shares despite his knowledge that customers would incur higher expenses on the front-end to acquire them. Panfil seemingly knew about the class A mutual funds having been designed for long-term investing; yet he made recommendations for investors to trade in the short term.
Moreover, Panfil reportedly failed to discuss with customers that other share classes were available for investing. Panfil supposedly never discussed with customers how the different operating expenses or sales charges with share classes affected returns, and neglected to identify when customers could save money through investing in class C shares. The Complaint stated that he failed to provide any of Ridgeway & Conger’s required disclosure forms to customers that were meant to detail this information. FINRA Department of Enforcement alleged that Panfil’s unsuitable investment recommendations were violative of FINRA Rules 2010 and 2111 as well as NAASD Rule 2310(b) and IM-2310-2.
The Complaint additionally stated that between October of 2013 to March of 2015, Panfil caused mutual fund switch forms to be forged in reference to transactions effected in the accounts of customers TSE, NB and DQB. Apparently, the switch forms were completed by Panfil and never provided to customers. Customers either claimed that signatures on those forms were unauthentic, or they did not recall completing or signing the documents. FINRA Department of Enforcement alleged that Panfil’s activities in that regard were violative of FINRA Rule 2010.
Moreover, the Complaint alleged that between April of 2012 and March of 2015, discretion had been regularly exercised by Panfil in the accounts of NB and DQB, where Panfil persisted in switching class A shares of mutual funds on a short-term basis. Apparently, trades were effected in those customers’ accounts by Panfil without him first obtaining written approval from customers; customers NB and DQB noted that trades were effected without Panfil ever discussing the trades with those customers. FINRA found that Panfil’s unauthorized trading was violative of FINRA Rules 2010 and NASD Rule 2510(b).
Panfil’s employment with Ridgeway & Conger, Inc. was terminated as of April 14, 2015. He was employed with Institutional Securities Corporation between March 25, 2015 and June 1, 2015; Kingsbury Capital, Inc. between June 22, 2015 and August 12, 2015; and Paulson Investment Company between August 25, 2015 and November 24, 2015.
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