Two general securities representatives (the
"Representatives") settled FINRA charges (see here and here) of using exploitative trading practices
against a cognitively impaired elderly customer.
According to FINRA, the Representatives executed
"qualitatively and quantitatively" unsuitable trades in
the elderly customer's accounts. FINRA found, among other
things, that the Representatives conducted transactions involving
the short-term trading of long-term investment products
(i.e., income-producing bonds that had long-term
maturity dates). In addition, one of the Representatives
"exercised trading discretion" on behalf of the customer
without his consent. As a result of the trading in the
customer's accounts, the Representatives generated a total of
$9 million in commissions between 2011 and 2012.
