Dennis Albert Mehringer Jr., of Pasadena, California, a stockbroker currently registered with Western International Securities, Inc., was charged by Financial Industry Regulatory Authority (FINRA) in a Complaint alleging that Mehringer, inter alia, made investment recommendations which were not suitable for customers. Department of Enforcement v. Mehringer, Jr., No. 2014041868001 (Dec. 16, 2016).
According to the Compliant, from July of 2010 to July of 2011, six brokerage accounts had been created by Mehringer for customer ES, which included ES’s business, personal and retirement accounts. The Complaint stated the customer communicated to Mehringer an objective for making growth based investments; however, the customer did not communicate an objective which involved trading or speculative investing.
The Complaint alleged that nearly all of the transactions in ES’s accounts were solicited via Mehringer. Apparently, between July of 2010 to August of 2013, unsuitable investment recommendations had been made by Mehringer to ES which involved short-term trading and inter-day class A mutual fund share switching. Mehringer allegedly recommended eighty-four transactions which consisted of buying and selling the class A shares on a short-term basis, where in forty-seven of the transactions, ES incurred between four and five percent sales loads on the front end.
The Complaint indicated that sixty-seven positions in the mutual funds were held by ES for under a six-month period; thirty-five were held by ES for under three months; and five were held by ES for under a week. Mehringer evidently earned $169,725.00 in commissions based upon his trading recommendations.
FINRA alleged that Mehringer made the recommendations involving inter-day switching despite not having any adequate grounds to conclude that his recommendations were suitable, particularly when considering the type and volume of trades as well as the fees pertaining to them. Critically, the Complaint alleged that Mehringer’s trading on a short-term basis was not suitable for anyone. Consequently, FINRA alleged that Mehringer’s conduct was violative of FINRA Rules 2111, 2010, and NASD Rule 2310. Further, the Complaint stated that Mehringer’s discretionary trading, which occurred without the customer’s authorization, was conduct violative of FINRA Rules 2010 and NASD Rule 2510(b).
FINRA Public Disclosure reveals that Mehringer has been identified in seven customer initiated investment related disputes containing allegations of his conduct while employed with Western International Securities, Inc. and First Allied Securities, Inc. Specifically, on October 10, 2012, a customer initiated investment related written complaint regarding Mehringer’s activities was resolved for $140,000.00 in damages based upon allegations that Mehringer overconcentrated the customer’s assets in options.
On July 24, 2015, a customer initiated investment related complaint involving Mehringer’s conduct was settled for $47,000.00 in damages based upon allegations that Mehringer failed to effect a corporate debt investment transaction based upon the customer’s instructions. Subsequently, on May 24, 2016, a customer initiated investment related arbitration claim involving Mehringer’s conduct was settled for $290,000.00 in damages based upon allegations that Mehringer effected unauthorized mutual fund trades in the customer’s account, and charged the customer with excessive commissions.
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