On January 5, 2018, FINRA Enforcement signed off on a Letter of Acceptance, Waiver and Consent (“AWC”) between FINRA and former financial advisor Larry Martin Boggs (“Boggs” or “Respondent”) (CRD# 1582741). Without admitting or denying FINRA’s findings, Mr. Boggs voluntarily consented to an industry bar from associating with any FINRA member firm in any capacity.
Mr. Boggs first became associated with a FINRA member firm in 1986 as a general securities representative. During the course of his career, he worked at a number of brokerage firms, including Ameriprise Financial Services, Inc. (“Ameriprise”) (CRD# 6363) from July 2009 to May 2015. Thereafter, he was associated with Wedbush Securities Inc. (“Wedbush”) (CRD# 877) for less than a year (2015-2016).
In May 2015, Mr. Boggs was discharged from his position by Ameriprise, based on allegations of “violations of company policy related to discretionary trading and suitability.” At around the same time frame, FINRA Enforcement conducted an investigation into Mr. Boggs and his sales practices and handling of customer accounts. FINRA’s findings include the following alleged activities and purported misconduct:
“Between January 2014 and May 2015, Boggs engaged in excessive and unsuitable trading in the accounts of five customer households. Boggs also improperly exercised discretion in these accounts without written authorization to do so. Finally, Boggs changed the investment objectives and risk tolerance for several of the above-referenced customers in order that they would conform to his high-frequency trading strategy, even though the customers’ investment objectives and risk tolerance had not actually changed. By doing so, Boggs caused the Firm’s books and records to be incorrect. As a result of such conduct, Boggs violated NASD Conduct Rule 2510(b), and FINRA Rules 2111, 4511 and 2010.”
In one instance of alleged misconduct cited by FINRA, Mr. Boggs initiated over 100 transactions on behalf of an elderly 82 year-old retired university professor whose investment objectives were growth and income, and whose risk tolerance was moderate. In connection with these purportedly unauthorized transactions, the elderly customer sustained losses of nearly $20,000 and incurred commission charges of $34,889.
Excessive trading, or churning, occurs where: (i) a registered representative exercises control over a customer’s account; and (ii) the level of activity in that account is inconsistent with the customer’s investment objectives, financial situation, and needs. Excessive trading constitutes a violation of FINRA’s suitability standards set forth under FINRA Rule 2111.
Brokerage firms like Ameriprise and Wedbush have a duty to ensure that their registered representatives are adequately supervised. Brokerage firms must also take reasonable steps to ensure that their financial advisors follow all applicable securities rules and regulations, in addition to internal policies and procedures. In instances when brokerage firms fail to adequately supervise their registered representatives, they may be held liable for losses sustained by investors.
At Law Office of Christopher J. Gray, P.C., our securities attorneys have successfully resolved a number of disputes on behalf of aggrieved investors, including losses sustained due to instances of fraudulent conduct, excessive trading or churning, and related broker misconduct. Investors may be able to recover their losses in FINRA arbitration. Investors may contact a securities arbitration attorney via the contact form on this website, by telephone at (866) 966-9598, or by e-mail at email@example.com for a no-cost, confidential consultation.