Gary Saitowitz, of Atlanta, Georgia, a stockbroker formerly registered with Transamerica Financial Advisors, Inc., has been fined $10,000.00 and suspended for eighteen months from associating with any Financial Industry Regulatory Authority (FINRA) member based upon consenting to findings that Saitowitz, inter alia, made unsuitable investment recommendations, participated in a private securities transaction, and misstated customer information on account documents. Letter of Acceptance, Waiver and Consent, No. 2014040691001 (Jan. 3, 2017).
According to the AWC, while Saitowitz was associated with Transamerica, he made unsuitable investment recommendations to customers PD, AM, GP and WC concerning allocations of the customers’ assets into non-traded real estate trust instruments.
The AWC stated that in October of 2012, an eighty-two-year-old investor, WC, acted upon Saitowitz’s investment recommendations to surrender an annuity, and to use the $133,000.00 in proceeds for the purchase of a non-traded real estate investment trust. Apparently, WC sustained a $11,455.00 penalty for surrendering the proceeds in the fixed annuity – a product which WC purchased approximately eighteen months prior and for principal protection purposes.
The AWC revealed that nearly thirty-five percent of WC’s proceeds had been invested in the non-traded real estate investment trust following the addition of the $133,00.00 in funds from the surrender of WC’s fixed annuity. FINRA found that Saitowitz’s investment recommendations to WC in this regard were unsuitable based upon: Saitowitz’s approach not conforming to the risk tolerance and objectives for investing which WC communicated to Saitowitz; the customer’s significant surrender penalty; and the over-concentration of WC’s assets in the non-traded real estate investment trust following the purchase.
The AWC additionally referenced that Saitowitz’s investment recommendations to PD, AM, and GP were also unsuitable based upon the customers’ large concentration of real estate investment trusts instruments. Particularly, the speculative investments which Saitowitz recommended constituted thirty-two percent of GP’s net worth; forty-three percent of AM’s net worth, and seventy-four percent of PD’s net worth. FINRA found that the customers’ tolerance for risk and objectives for investing did not call for such high allocations in Saitowitz’s recommended investments. Consequently, Saitowitz’s conduct was considered by FINRA to be violative of FINRA Rules 2010 and 2111.
The AWC additionally stated that Saitowitz participated in a private securities transaction which was not approved by his firm. Particularly, in 2013, Saitowitz facilitated a $46,600.00 sale of customer DJ’s interests in real estate investment trusts to customer SS. Apparently, Saitowitz aided the customers by completing paperwork and providing it to the real estate investment trust distributor. The AWC indicated that Saitowitz neither utilized Transamerica for purposes of effecting the transaction, nor provided the firm with any notification concerning it. Consequently, FINRA found that Saitowitz’s conduct was violative of FINRA Rule 2010 and NASD Rule 3040.
FINRA Public Disclosure reveals that Saitowitz has been named in three customer arbitrations concerning allegations of his misconduct. Particularly, on June 17, 2005, a customer filed an investment related arbitration claim involving Saitowitz’s conduct, in which the customer requested $7,500.00 in damages based upon allegations that Saitowitz effected a variable universal life insurance policy transaction which was not suitable for the customer.
Additionally, on December 27, 2006, a customer filed an investment related arbitration claim concerning Saitowitz’s conduct, in which the customer requested $13,735.19 in damages based upon allegations that Saitowitz misrepresented the terms of the customer’s insurance policy. On November 13, 2013, another customer initiated investment related arbitration action involving Saitowitz’s activities was filed, in which the customer requested $8,000.00 in damages based upon allegations that Saitowitz was responsible for effecting a transaction which resulted in an adverse tax consequence to the customer.
On April 1, 2014, Transamerica Financial Advisors, Inc. terminated Saitowitz based upon allegations that Saitowitz violated the firm’s procedures and policies concerning alternative investment sales, submitted client data on new account forms which was not accurate, failed to make required disclosures concerning outside business activities, and attempted to effect unreasonable asset transfers in customer accounts.
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