Todd Ray Anderson of Tucson, Arizona, a stockbroker registered with Cetera Advisors LLC, has been fined $5,000.00 and suspended for 45 days from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity because Anderson made unsuitable investment recommendations of mutual funds. Letter of Acceptance, Waiver, and Consent No. 2019063749201 (April 20, 2023).
According to the AWC, from April of 2014 to September of 2019, at the recommendation of Anderson, a senior customer made investments exceeding $1,000,000.00 in 34 mutual funds across 31 different fund families. Each of these funds offered volume discounts on sales fees, with the discount amount increasing as the investment reached higher breakpoint levels established by the fund.
These breakpoints could be achieved through a single investment in a fund or by utilizing rights of accumulation, which allowed the fund to combine new investments with existing holdings within the same fund family to determine the discount level. However, during the time that providing recommendations to the customer, Anderson failed to consider that by consolidating the investments into fewer fund families, the customer could have reached higher breakpoint levels and obtained greater fee discounts, including through rights of accumulation.
FINRA stated that Anderson’s recommendation for the customer to invest in multiple fund families without considering the available rights of accumulation and breakpoint discounts resulted in unnecessary sales charges totaling $20,867.00. Therefore, Anderson violated FINRA Rules 2111 and 2010.
FINRA Public Disclosure shows that Anderson is also referenced in a customer initiated investment related FINRA securities arbitration claim that was settled for $408,704.00 in damages based upon allegations that Anderson made misrepresentations of material fact in connection with the sale of variable annuities when Anderson was associated with Geneos Wealth Management Inc. FINRA Arbitration No. 09-03698 (October 14, 2009).
Anderson is also referenced in a customer initiated investment related FINRA securities arbitration claim that was settled for $9,000.00 in damages based upon allegations that Anderson made unsuitable recommendations of direct investments and real estate securities during the time that Anderson was associated with Cetera Advisors LLC. FINRA Arbitration No. 20-02429 (January 13, 2022).
Anderson’s stockbroker and investment adviser representative registration with Cetera Advisors LLC was terminated on October 4, 2019. On September 6, 2019, Cetera Advisors LLC discharged Anderson based upon allegations that Anderson engaged in unauthorized trading and engaged in an undisclosed outside business activity.
Anderson has been registered with Benchmark Investments LLC as a stockbroker since September 17, 2019, and registered with Kingswood Wealth Advisors LLC as an investment adviser representative since January 24, 2022.