Thomas Paul Schober, of Westborough, Massachusetts, a former stockbroker who had been registered with SII Investments, Inc., has been subject to a customer initiated investment related arbitration claim on September 21, 2016, in which the customer requested $5,000.00 in damages based upon allegations that Schober effected unsuitable investment transactions in the customer’s account.
FINRA Public Disclosure also reveals that Schober has been subject to two additional customer arbitrations. Particularly, on May 4, 2016, a customer initiated investment related arbitration action regarding Schober’s conduct was resolved for $12,251.11 in damages based upon allegations that Schober made unsuitable recommendations concerning annuity products.
On September 6, 2016, another customer filed an investment related arbitration claim involving Schober’s actions, in which the customer requested $350,000.00 in damages based upon allegations that Schober sold the customers fixed indexed and variable annuity products that were not suitable.
Additionally, on March 3, 2016, Schober was permanently barred from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity after consenting to findings that he made unsuitable recommendations to customers and tried to hide his misconduct when questioned by his firm. Letter of Acceptance, Waiver and Consent, No. 2015044007001 (Mar. 3, 2016).
According to the AWC, from August of 2013 to November of 2014, Schober made investment recommendations to two senior customers, LP and JM, concerning the purchase of annuity products. Schober, according to FINRA, made the annuity recommendations to JM and LP to pursue his financial gain at JM’s and LP’s expense. Particularly, FINRA found that Schober lacked a reasonable basis to believe that his recommended exchanges were suitable for JM and LP based upon the excessive costs and minimal benefit, if any benefit whatsoever, provided to JM and LP via exchanging. FINRA concluded that Schober’s conduct was violative of FINRA Rules 2110, 2111 and 2330(b)(1).
Without admitting or denying the findings, Schober consented to the sanction and to the entry of findings that he recommended unsuitable annuity exchanges in the accounts of two senior customers. The findings stated that the victims of Schober’s unsuitable recommendations are ages 84 and 83, respectively, who maintained separate brokerage accounts with Schober at his member firm. One of the customers held power of attorney for the other, who suffers from dementia. Both customers were conservative investors with limited financial means who relied on the income from their investments. Schober effected the annuity exchanges in the accounts of the customers and designed these exchanges to benefit himself at the customers’ expense. All of the annuities that Schober exchanged were still in the surrender period. Consequently, the customers paid total surrender charges of approximately $154,642 to sell their annuities. Additionally, the customers paid sales charges of approximately $69,000, of which Schober received approximately $65,000 in commissions, and incurred new surrender periods in connection with their annuity purchases. Further, the annuities that Schober exchanged offered comparable income benefits for the customers. Schober never disclosed to them the amount of the surrender charges they would incur to sell their annuities. Nor did Schober explain the sales charges associated with the purchase of the new annuities or that they would be subject to new surrender periods. The findings also stated that Schober attempted to conceal the unsuitable annuity exchanges by providing false information concerning the source of funds on the annuity transaction documents he submitted to the firm and annuity companies.
Additionally, the AWC stated that Schober falsified information to his firm regarding JM’s and LP’s funds used to purchase the annuity products, so as to conceal that JM’s and LP’s annuities had been exchanged versus having been newly purchased. FINRA concluded that Schober’s false statements constituted conduct violative of FINRA Rule 2010 and 4511.
Schober was ultimately terminated from SII Investments, Inc. based upon allegations that Schober did not abide by SII Investments’ policies pertaining to surrenders and reinvestment of annuities, and due to Schober’s aforementioned false statements.
Guiliano Law Group
Our practice is limited to the representation of investors. We accept representation on a contingent fee basis, meaning there is no cost to you unless we make a recovery for you. There is never any charge for a consultation or an evaluation of your claim. For more information, contact us at (877) SEC-ATTY.
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