Robert Patrick Foley, of Red Bank, New Jersey, a stockbroker formerly registered with Wynston Hill Capital LLC, has been fined $5,000.00 and suspended for four months from associating with any Financial Industry Regulatory Authority (FINRA) member in any principal capacity supported by findings that Foley failed to supervise stockbrokers who excessively traded in customer accounts when Foley was registered with Wynston Hill Capital. Letter of Acceptance, Waiver, and Consent No. 2019060648802 (December 1, 2021).
According to the AWC, between January and June of 2019, Foley was the supervisor for stockbrokers located in the New York City branch office of Wynston Hill. The written supervisory procedures required Foley to review trades to determine if stockbrokers engaged in wrongdoing, including excessive trading and unsuitable recommendations. Foley was required under these supervisory procedures to ensure that stockbrokers were compliant with securities laws and registration requirements. He failed to supervise, according to FINRA.
FINRA first pointed out that Foley failed to undertake reviews of orders or perform periodic reviews to identify possible excessive trading or unsuitable recommendations. Foley engaged in weekly trade reviews; however, this did not involve his review of trades for suitability. He did not concentrate on any red flags of excessive trading, such as high commissions, in-and-out trading, and trades placed on margin. The AWC states that Foley’s lack of focus resulted in two stockbrokers making excessive trades in customer accounts. Two customers’ accounts were charged $300,000.00 in fees and commissions in under 180 days.
The regulator states that Foley talked with chief compliance officers about commissions charged to two customers, but he failed to identify whether the stockbrokers’ trades aligned with customers’ investment profiles. He did not speak with the customers despite their accounts having annualized cost-to-equity ratios exceeding 100 percent, meaning that investors needed to generate more than 100 percent returns to break even.
The AWC states that stockbrokers were also not registered in the customers’ states. Foley failed to follow up on concerns that a different stockbroker – not the two stockbrokers making recommendations – was listed as the customers’ representative of record. The AWC states that Foley did not contact the customers or investigate red flags about these stockbrokers, violating FINRA Rules 2010 and 3110.
Foley was registered with Wynston Hill Capital between February 21, 2018, and January 4, 2021.
