According to BrokerCheck records, Elaine LaCerte (LaCerte), also known as Elaine Diones and Elaine Diones Helzer, was suspended by the Financial Industry Regulatory Authority (FINRA) in August 2017.
LaCerte was suspended for allegedly engaging in an unsuitable pattern of short-term trading of Unite Investment Trusts (UITs) in over 100 customer accounts. Without admitting or denying the findings, LaCerte consented to the sanctions and the entry of findings. The findings stated that “in connection with these accounts, LaCerte repeatedly recommended that the customers purchase UITs and then sell these products well before their maturity dates. In addition, on more than 100 occasions, LaCerte recommended that her customers use the proceeds from the short-term sale of a UIT to purchase another UIT with identical investment objectives. LaCerte’s recommendations caused the customers to incur unnecessary sales charges, and were unsuitable in view of the frequency and cost of the transactions.” LaCerte has been banned from the industry for six months and was ordered to pay a $5,000 fine.
Moreover, LaCerte has been subject to four customer disputes.
In November 2016, a customer alleged LaCerte misrepresented material facts with respect to the purchase of a municipal bond. This dispute settled for $25,000.
In August 2016, a customer alleged LaCerta recommended unsuitable investments. This dispute settled for $24,464.76.
In July 2016, a customer alleged LaCerta misrepresented material facts with respect to investment risks. This dispute settled for $4,000.
Brokers have a responsibility treat investors fairly which includes obligations such as making only suitable investments for the client. In order to make a suitable recommendation, the broker must meet certain requirements. First, there must be reasonable basis for the recommendation the product or security based upon the broker’s investigation and due diligence into the investment’s properties including its benefits, risks, tax consequences, and other relevant factors. Second, the broker then must match the investment as being appropriate for the customer’s specific investment needs and objectives such as the client’s retirement status, long or short term goals, age, disability, income needs, or any other relevant factor.
False representations include either written or oral statements containing misrepresentations or omissions of information that are material to an investor and induce the purchase, sale, or holding of a security. Under the Securities Exchange Act of 1934 (15 U.S.C. § 78a et seq.) and Rule 10b-5 a misrepresentation or omission of a fact is material if a reasonable investor might have considered the fact important in the making of the investment decision. Also the Financial Industry Regulatory Authority (FINRA) Rule 2020 also prohibits members from effecting “any transaction in, or induce the purchase or sale of, any security by means of any manipulative, deceptive or other fraudulent device or contrivance.”
Lacerte has spent thirty years in the securities industry and was most recently registered with Morgan Stanley in Colorado Springs, Colorado (2009-2016). Previous registrations include Citigroup Global Markets Inc., Morgan Stanley DW Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, F&G Securities, Inc., and Diones & Company.
Gana LLP’s investment fraud attorneys represent investors who have suffered securities losses due to the mishandling of their accounts due to claims of unsuitability and misrepresentation. The majority of these claims may be brought in securities arbitration before FINRA. Our consultations are free of charge and the firm is only compensated if you recover.