Broker-dealer Essex Censured and Fined for Alleged Unsuitable Mutual Fund Switches
From February 2010 through March 2011, Essex Securities, LLC, a FINRA-registered broker-dealer since December 1998 headquartered in Topsfield, MA, allegedly engaged in a pernicious pattern of unsuitable mutual fund switching with the accounts of seven customers, using a representative known only as JT as its alleged wrongdoer, according to a FINRA Letter of Acceptance, Waiver and Consent (AWC).
The AWC further alleges that, on a minimum of 29 instances, JT allegedly recommended that his customers sell mutual funds within only one to thirteen months after purchasing them, and that Essex reportedly earned gross commissions of approximately $60,000 on these switch transactions of which said agent, JT, raked in approximately $54,000.
These customers allegedly held the Class A mutual funds at issue for less than 6 months, and then JT used the revenues from said sales to purchase more mutual funds offered by other fund families for those customers, precipitating these poor customers to pay additional commissions, the AWC also reports.
In addition, Essex, with approximately 50 registered representatives operating out of 26 branch offices, allegedly failed to establish and maintain a proper supervisory system, the AWC further notes.
As a result of the alleged mutual fund switches, and supervisory gaffes, Essex reportedly broke NASD and FINRA Rules, and will accordingly face a censure, a $20,000 fine, and be forced to offer restitution to customers in the amount of$6,009.70, the AWC further reports.
Essex reportedly has no prior disciplinary history with the SEC, any self-regulatory organization, or any state securities regulator.
Investment Recovery Lawyers Investigating
The Peiffer Wolf Carr & Kane investment recovery lawyers often represent investors who lose money as a result of investment misconduct or mutual fund switching. They take most cases of this type on a contingency fee basis and advance the case costs, and only get paid for their fees and costs out of money they recover for their clients.
Investors who believe they lost money as a result of investment misconduct or mutual fund switching may contact the investment recovery lawyers at Peiffer Wolf Carr & Kane, Jason Kane or Joe Peiffer, for a free, no-obligation evaluation of their recovery options, at (585) 310-5140.