TAG | Unsupervised activity of brokers
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In a January 25th., 2012, article from InvestmentNews.com, the staff writes that Former Boston Red Sox catcher and two-time World Series winner Doug Mirabelli, who made a nice career of being the preferred backstop to knuckleballer Tim Wakefield, finally saw a pitch even he couldn’t handle.
In March 2008, the same month he was released by the Red Sox, Mirabelli and his wife invested $880,219 with Bank of America Merrill Lynch adviser Phil Scott and took out loans that brought their account value to $1.8 million, according to an article in The New York Times. Scott put the money into the Merrill Lynch Phil Scott Team Income Portfolios, a bundle of 33 dividend-paying growth stocks. The loans were made on the condition that the account not dip below $1 million.
The InvestmentNews.com article goes on to say that by November, the Mirabellis’ account had dropped below that level, and they liquidated it to cover the loans. The Mirabellis argued in arbitration that Scott had put his client’s money into unsuitable, all-growth-stock investments and improperly briefed the couple on the loans and their requirements.
This arbitration panel ruled in favor of the Mirabellis and awarded them $1.2 million to cover their initial investment, plus all legal fees and arbitration costs. This was the second defeat for Scott in the last 12 months, according to The New York Times article. Merrill has moved to vacate the previous award and it’s unclear if they will do the same with Mirabelli’s.
“We disagree with the panel’s decision given the facts presented in this case,” said Bill Halldin, a spokesman for Merrill. “This account was handled properly during a very difficult time when there was extreme market volatility.”
Doug Mirabelli, 41, earned roughly $7 million over a dozen seasons. He now works as a real estate agent in Michigan.
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Stuart Gregory Burchard (CRD # 2264551, Registered Principal, San Francisco, CA) submitted an Offer of Settlement in which he was barred from association with any FINRA member in any capacity. Without admitting or denying the allegations, Burchard consented to the described sanction and to the entry of findings that a member firm, acting through Burchard, failed to prepare accurate general ledgers and trial balances, failed to prepare accurate computations of net capital under the aggregated indebtedness standard while conducting a securities business, failed to maintain or meet its minimum net capital requirement, failed to notify FINRA when its net capital declined below the minimum required under SEC Rule 15c3-1, and failed to prepare and file FOCUS Reports Part IIA for several calendar quarters.The findings stated that the firm, acting through Burchard, failed to comply with the terms of its membership agreement when it acted as a dealer after executing more than 10 proprietary trades in its account during a calendar year, thereby increasing its minimum net capital requirement from $5,000 to $100,000, and failed to file an application for approval of a material change in its business iperations as origianly provided in its membership agreement. The findings also stated that the firm, acting through, Burchard, failed to report customer complaints, which were discloseable events, within 10 business days and statistical and summary information of customer complaints the firm received on a quarterly basis; failed to timely amend Forms U4 to disclose statements; and failed to timely report settlements, arbitration awards and a default judgment that were required to be disclosed. The findings also included that the firm, acting through Burchard, failed to develop, establish and implement an adequate AML compliance program; failed to conduct and/or document adequate independent testing of its AML compliance program and procedures; failed to establish procedures to ensure the designation of an AML Compliance Officer to NASD; failed to notify NASD of any changes in contact information for its AML Compliance Officer in a reasonable amount of time and failed to implement and adequate AML training program; failed to establish and implement an adequate Customer Identification Program; failed to evidence that a due diligence review was performed to review the identities or beneficial owners of accounts of foreign financial institutions; failed to establish adequate procedures designed to monitor, detect and investigate suspicious activity despite the presence of red flags noted in the firm’s procedures; failed to prepare and maintain exception reports produced to review for unusual activity in accounts; failed to evidence due diligence in opening accounts of foreign financial institutions; failed to monitor and respond to requests for information from FinCEN; and failed to establish and implement policies, procedures and internal controls reasonably designed to achieve compliance with the Bank Secrecy Act, inluding failure to implement policies and procedures designed to detect and report suspicious activity and to verify the identity of customer.
FINRA found that Burchard failed to reasonable supervise the activities of a registered representative and registered principal to ensure that she performed the supervisory responsibilities Burchard delegated to her. (FINRA Case #2008011656401)
This listing appeared on the FINRA website’s Disciplinary Actions for January, 2011.
If you have been a victim of the alleged fraudulent schemes of Stuart Gregory Burchard call a Securities Arbitration Lawyer for a free consultation on how to recover your losses. To speak with an attorney, call 888-760-6552, or visit www.stockmarketlawsuit.com. Soreide Law Group, PLLC., representing investors nationwide before FINRA the Financial Industry Regulatory Authority.
AML compliance program · Customer Identification Program · failure to file FOCUS Reports · Financial Industry Regulatory Authority · FinCEN · FINRA · finra lawyer · firms failing to report customer complaints · FOCUS · FOCUS reports part IIA · Forms U4 · Ft. Lauderdale Securities Lawyer · investment fraud · NASD · NASD Compliance · SEC Rule 15c3-1 · securities arbitraton lawyer · securities fraud lawyer · stock broker fraud · Stock fraud lawyer · stockbroker misconduct · Stuart Burchard · Stuart Gregory Burchard · unauthorized trades · Unsupervised activity of brokers