In March 2016, a customer complaint was filed alleging Walker made unauthorized sales of different stocks, unauthorized and unsuitable purchases of variable annuities, and unauthorized mutual fund switches during the period of June 2014 to June 2015 while Walker was employed at LPL Financial LLC. The stated alleged damages were $208,764.00. The claim was settled in November 2016 for the amount of $175,000.00.
Walker has two additional previous disclosures from 2005 and 1999. In April 2005, a claim was filed alleging that Walker practiced in excessive turnovers in the client’s mutual fund account. The claim alleged damages of $30,000.00. This claim was settled in July 2005 for the final settlement amount of $9,900.00.
In January 1999, a customer alleged that Walker advised her to surrender her IDS Life Fixed Retirement Annuity IRA in order to use the proceeds to purchase an IDS Variable Universal Life Insurance Policy. Walker inaccurately advised her that the transaction was non-taxable. The settlement of $14,379.46 included reimbursement for taxes, interest, penalties resulting from the transaction in question.
Gana Weinstein LLP’s investment fraud attorneys represent investors who have suffered losses due to the mishandling of their accounts due to unsuitable and unauthorized trades. 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.
A variable annuity is complex financial and insurance product that an investor should be fully aware of the risks, rewards, and features of before investing. The benefits of variable annuities are often outweighed by the terms of the contract including surrender charges, mortality and expense charges, management fees; market-related risk, and rider costs. Variable annuities are high sales commission products for financial advisors and sometimes advisors push these products on persons who do not need them or cannot benefit from them.
Unauthorized trading occurs when a broker sells, buys, or exchanges, securities without the prior consent or authority from the investor. Unless an investor has given the broker discretion to make trades in the account, the broker must first discuss all trades with the investor before executing them. NYSE Rule 408(a) and FINRA Rules 2510(b) and 2020 explicitly prohibit brokers from making discretionary trades in a customers’ non-discretionary accounts. The SEC has also found that unauthorized trading violates just and equitable principles of trade and constitutes violations of Rule 10b and 10b-5 due to its fraudulent nature. As one court summed up, no omission could be more material than the failure to inform the investor of his purchases and sales. However, it is important to note that the laws vary from state to state regarding unauthorized trading.