Mark Tauzin of Lafayette, Louisiana, a stockbroker formerly associated with LPL Financial LLC, was fined $20,000.00 and suspended for eight months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity after consenting to findings that he effected unsuitable trades of unit investment trusts in customer accounts. Letter of Acceptance, Waiver and Consent, No. 2014043506501 (Oct. 19, 2016).
According to the AWC, between November of 2012 and November of 2014, Tauzin made investment recommendations for the purchase of unit investment trusts in fourteen customer accounts. Apparently, these investments contained maturities of at least twenty-four months, and contained sales charges that ranged from 2.5% to 3.95%.
Tauzin reportedly effected two-hundred and fifteen unit investment trust transactions in the accounts of fourteen customers in the course of a twelve-month period. The AWC stated that customers collectively paid $316,840.50 in sales charges. Contemporaneously, Tauzin generated $205,115.02 in commissions.
FINRA found that Tauzin’s recommendations for investors to trade unit investment trusts on a short term basis was baseless; he lacked a proper foundation to conclude that such trading approach would be suitable for his customers. The AWC stated that these products, as a result of substantial upfront costs, were not designed for short term trading. FINRA found that Tauzin’s conduct of making unsuitable investment recommendations was violative of FINRA Rules 2010 and 2111.
The AWC also stated that Tauzin also procured blank forms that were signed by customers, which was in direct violation of his firm’s policies. Apparently, Tauzin obtained sixteen forms, which included switch disclosure documents, account application forms, margin trading agreements, and ACH forms. The AWC stated that such forms were utilized in the accounts of at least two customers, and for transactions which were purportedly the same as the blank forms signed by customers that Tauzin held within his files. Apparently, LPL prohibited the firm’s staff, such as Tauzin, from obtaining signed blank documents, even if such customers had consented to such. FINRA found that Tauzin’s conduct in this regard was violative of FINRA Rule 2010.
In addition to the fine and suspension, Tauzin also consented to the disgorgement of the $205,115.02 in commissions which he obtained from customers pursuant to his unsuitable investment recommendations in unit investment trusts.
FINRA Public Disclosure reveals that on November 12, 2014, Tauzin was terminated from LPL Financial based upon allegations that he violated his firm’s document signature policies pertaining to trading of unit investment trusts on a short term basis. On August 4, 2015, Tauzin became subject to a pending customer initiated investment related arbitration claim, in which the customer requested $774,836.00 in damages based upon allegations that Tauzin made misrepresentations to the customer concerning unit investment trust investments, and effected unauthorized and unsuitable trades in the customer’s account.
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