Sharon Mae Perdue, a former broker at Boston, Massachusetts based LPL Financial LLC, submitted a Letter of Acceptance, Waiver and Consent in which she consented to the described sanctions and to the entry of the Financial Industry Regulatory Authority's (FINRA) findings that she entered all of her trades in some over-the-counter securities as being unsolicited when, in fact, such trades were solicited and, by this means, mismarked numerous trades thereby causing her firm's books and records to be inaccurate. The findings also stated that Ms. Perdue exercised discretion in customers' accounts. Some of the customers verbally authorized Ms. Perdue to make trades in their accounts without requiring her to contact them on the same day of the trade. Other customers authorized Ms. Perdue to follow an agreed-upon investment strategy, but she did not always effect the trades on the same day as her discussion with the customers. None of the customers had provided written authorization to Ms. Perdue to exercise such discretion, and she did not have the firm's prior written acceptance of any discretionary account.
FINRA's findings further stated that Ms. Perdue sent misleading email communications to some customers that failed to disclose material information about the securities she recommended, included false and/or misleading information, contained predictions and/or projections of future price performance for securities, and failed to include a reasonable basis for the securities she recommended. Moreover, the findings included that Ms. Perdue made material misrepresentations to customers when she made improper price predictions and promised unrealistic returns regarding certain over-the-counter securities she had recommended to the customers. FINRA found that Ms. Perdue recommended and sold a low-priced, over-the-counter security to customers who were seniors. When Ms. Perdue made the recommendations and sales, she did not have reasonable grounds for believing that the recommendations were suitable based on each customer's other security holdings, financial situation, and needs.
Ms. Perdue, of Longmont, Colorado, was fined $15,000 and suspended from association with any FINRA member in any capacity for two years. The fine must be paid either immediately upon Ms. Perdue's re-association with a FINRA member firm following her suspension, or prior to the filing of any application or request for relief from any statutory disqualification, whichever is earlier. The suspension is in effect from April 15, 2013 through April 14, 2015.
Broker-dealers must establish and implement a reasonable supervisory system to protect customers from broker misconduct. If broker-dealers do not establish and implement a reasonable supervisory system, they may be liable to investors for damages flowing from the misconduct. Therefore, investors who have suffered damages due to Ms. Perdue's alleged discretionary transactions, misrepresentations, and/or unsuitable recommendations can bring forth claims to recover losses against broker-dealers like LPL Financial.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. Please see our Instablog profile (left column) for ways to contact us and get answers to any of your questions about this blog post and/or any related matter.