Dennis Albert Mehringer Jr. of Passadena California a stockbroker formerly registered with Western International Securities Inc. has been fined $50,000.00 and barred from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity according to a FINRA Office of Hearing Officers Extended Hearing Panel Decision containing findings that Mehringer made unsuitable recommendations to a customer and placed unauthorized trades in a customer’s account. Department of Enforcement v. Dennis A. Mehringer Jr. Disciplinary Proceeding No. 2014041868001 (Apr. 30, 2018).
According to the Decision, between 2010 and 2013, Mehringer made unsuitable recommendations to customer ES concerning the trading of mutual fund class A shares. Evidently, Mehringer’s recommendations led to eighty-two intra-day switches and short-term trades in the mutual fund class A shares being placed in ES’s account. The Decision stated that all of those sales and purchases involving class A shares had been solicited by Mehringer.
FINRA’s Extended Hearing Panel determined that Mehringer’s trading was not suitable for ES or any other customer for that matter. Specifically, Mehringer’s class A share purchases and sales were reportedly so excessive that it was not possible for ES to account for all of the transactions; ES’s positions in class A shares had been held for a short time frame prior to being sold. The Decision stated that the purchases and sale transactions were executed in a way which demonstrated a motive on Mehringer’s part to generate as much commissions from ES as possible rather than pursuing transactions that served ES’s interests.
The Decision also noted that Mehringer’s intra-day switching was excessive, especially when coupled with the frequent class A mutual fund share trading. FINRA’s Extended Hearing Panel determined that Mehringer’s trading was not suitable because there was no way in which a customer would be able to expect an adequate return in consideration of the high front-end costs and frequency in which trades were effected.
Evidently, over a three year period ES was charged $182,000.00 in commissions pertaining to the class A shares that Mehringer excessively traded in ES’s account. Mehringer apparently received ninety percent of the commissions charged to the customer. The Extended Hearing Panel concluded that Mehringer’s conduct was violative of FINRA Rules 2010 and 2111 as well as National Association of Securities Dealers (NASD) Rule 2310.
The Decision also stated that Mehringer placed transactions in ES’s investment account that ES had not authorized. Mehringer evidently failed to discuss any of the eighty-two transactions with ES prior to effecting the trades in ES’s account. Apparently, ES instructed Mehringer to cease trading in ES’s account after having been made aware of the frequency of trades that had been placed; however, Mehringer ignored ES’s instructions and continued to trade in ES’s account. FINRA concluded that Mehringer’s conduct was violative of FINRA Rule 2010 and NASD Rule 2510.
FINRA Public Disclosure confirms that Mehringer has been identified in nine customer initiated investment related disputes containing allegations of Mehringer’s wrongdoing while employed with First Allied Securities and Western International Securities. For example, a customer initiated investment related civil action involving Mehringer’s activities was settled for $75,000.00 in damages supported by accusations that the customer was provided poor investment advice with regard to a real estate transaction and defined benefit plan loan arrangements. Civil Action No. SC100191 (Oct. 28, 2009).
On October 10, 2012, another customer initiated investment related complaint regarding Mehringer’s conduct was resolved for $81,296.00 in damages based upon allegations that the customer’s assets were over-concentrated in options. On July 24, 2015, a customer initiated investment related complaint involving Mehringer’s activities was settled for $47,000.00 in damages founded on accusations of the failure to execute a corporate debt trade in the customer’s investment account. Subsequently, a customer initiated investment related arbitration claim involving Mehringer’s conduct was resolved for $290,000.00 in damages supported by allegations that Mehringer traded in the customer’s account without the customer’s consent and effected mutual fund and equity trades on an excessive basis. FINRA Arbitration No. 14-02643 (May 24, 2016).
Moreover, a customer filed an investment related arbitration claim concerning Mehringer’s activities in which the customer sought $231,688.55 in damages based upon accusations that unsuitable promissory note recommendations had been made to the customer. FINRA Arbitration No. 17-00123 (Jan. 10, 2017). On May 17, 2017, another customer initiated investment related complaint concerning Mehringer’s activities was settled for $62,250.00 in damages founded on allegations that Mehringer was liable for the customer’s poor performance on a debt investment held in the customer’s portfolio.
Mehringer’s registration with Western International Securities, Inc. ceased on May 7, 2018.
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