Thomas Francis Niles of Saratoga Springs New York is a stockbroker associated with Morgan Stanley who has been fined five thousand dollars and suspended for three months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that he effected transactions in customer accounts that were not suitable for the firm’s customers. Letter of Acceptance Waiver and Consent No. 2015047225601 (Feb. 8 2018).
According to the AWC, between July of 2012 and December of 2014, Niles executed a pattern of short-term trades involving unit investment trusts in the accounts owned by one-hundred and forty-eight customers, where FINRA found Niles’ trading scheme to be unsuitable for customers.
The AWC stated that Niles had consistently advised customers to buy the unit investment trusts, only to recommend that customers sell them before they had matured.
Apparently, most of the unit investment trusts recommended by Niles had maturities that spanned twenty-four months. Customers reportedly incurred sales charges on unit investment trust transactions which ranged from 1.95 percent to as high as 3.95 percent.
Evidently, recommendations had been routinely made by Niles to customers for them to sell unit investment trust positions in their investment portfolios in less than twelve months from the point that the unit investment trust purchases had been made. The AWC stated that on average, customers only held the unit investment trusts for two-hundred and eighty-five days.
The AWC further detailed that Niles recommended hundreds of times that customers utilize the unit investment trust sale proceeds to buy other unit investment trusts containing identical or similar objectives for investing.
FINRA concluded that customers paid unnecessary sales charges as a result of the recommendations made by Niles, and that the recommendations Niles made were not suitable for customers in consideration of the cost and frequency of transactions effected in the customers’ accounts. Consequently, FINRA found that Niles’ conduct was violative of FINRA Rules 2010 and 2111, as well as National Association of Securities Dealers (NASD) Rule 2310.
Niles’ registration with Morgan Stanley was terminated on September 15, 2015. Since September 3, 2015, he has been registered with Janney Montgomery Scott LLC.
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