William Henry Weisbrod, of New Jersey, a stockbroker formerly registered with Purshe Kaplan Sterling Investments, Inc., following a bar by Financial Industry Regulatory Authority (FINRA) (November 15, 2023) has had his securities registration revoked by the New Jersey Bureau of Securities because Weisbrod was barred by Financial Industry Regulatory Authority (FINRA) (November 15, 2023). Weisbrod has appealed his revocation.
On August 2, 2023, Weisbrod was permanently barred from associating with any FINRA member in any capacity because he breached his fiduciary duties owed to a community bank while employed at Purshe Kaplan Sterling Investments Inc. Letter of Acceptance, Waiver, and Consent No. 2020065297001 (August. 2, 2023).
According to the AWC:
Weisbrod consented to the sanctions and to the entry of findings that he breached fiduciary duties owed to a community bank for which he served as an advisory director and consultant. The findings stated that the bank was a customer of Weisbrod’s member firm and relied upon his investment knowledge and experience to determine its investment strategy. Weisbrod breached his fiduciary duties to the bank by directing it to engage in an investment strategy that generated revenue for Weisbrod but exposed the bank to excessive risk and unnecessary trading costs.
At Weisbrod’s recommendation, the bank opened brokerage accounts at the firm with a registered representative who worked in the same office as Weisbrod. Although Weisbrod represented to the firm that he would not be involved with the bank’s investments through it, Weisbrod directed the trading in the bank’s accounts. Weisbrod recommended that the bank engage in a risky trading strategy involving fixed-income securities purchased through the firm.
Weisbrod’s trading generated over $1 million in commissions for the registered representative assigned to the bank’s accounts, who directed more than $370,000 of these commissions to Weisbrod, through a series of payments that Weisbrod did not disclose to the bank. Weisbrod recommended that the bank trade through the firm even though it lacked a fixed-income trading desk. Because the firm lacked a fixed-income trading desk, it had to use a third-party “broker’s broker” to acquire fixed-income securities for the bank, which caused the bank to pay approximately $1.25 million in additional markups to the broker’s broker.
Weisbrod did not disclose these markups to the bank. As a result of Weisbrod’s trading strategy, the bank spent more than $600,000 to remediate the risk of its investment portfolio. The findings also stated that Weisbrod falsely represented to the firm that he was not involved with the bank’s investments through it in connection with the firm’s inquiry into his OBA involving the bank.
FINRA Public Disclosure shows that Weisbrod is referenced in two customer initiated investment related disputes concerning Weisbrod’s conduct while associated with securities broker dealers. On June 1, 2005, a customer filed an investment related complaint involving Weisbrod’s conduct in which the customer requested $120,000.00 in damages based upon allegations that Weisbrod misused the customer’s funds when Weisbrod was associated with Citigroup GMI.
On January 30, 2023, a customer initiated investment related complaint involving Weisbrod’s conduct was settled for $425,000.00 in damages based upon alleged fraud, breach of fiduciary duty, and unsuitable trading in asset-backed bonds during the time that Weisbrod was associated with Purshe Kaplan Sterling Investments.
Weisbrod was associated with Purshe Kaplan Sterling Investments in Fairfield, New Jersey from April 27, 2009, to February 18, 2021.
