John P. Jones (Jones) was recently sanctioned by the Financial Industry Regulatory Authority (FINRA) alleging that Jones engaged in trading five unsuitable, speculative private placements securities in a customer’s account. Jones was suspended for six months and fined $15,000.
Jones entered the securities industry in 1986, from August 2003 to December 2007 he was registered with Jones, Byrd, & Attkisson, Inc.; from December 2007 to February 2010 he was registered with First Legacy Securities, LLC; and from February 2010 to present he was registered with Moloney Securities Co., Inc.
According to FINRA, Jones made unsuitable recommendations to a client who had a moderate risk tolerance and an investment goal of preservation of capital. Despite the client’s moderate risk tolerance, Jones still put the majority of her liquid net worth into the five speculative private placements. The customer’s investment in the private placements allegedly constituted more than 50% of her liquid net worth. FINRA further alleges that there were no reasonable grounds for Jones to believe that the recommendations were suitable for the customer.
According to NASD Conduct Rule 2310, financial advisors have to tailor their recommendations to their clients based on their clients’ investment plan and risk tolerance, and must have a reasonable basis for all recommendations to customers.
If you believe you have been the victim of stockbroker misconduct, you may wish to consult an attorney to find out more about your legal rights and options. Investors may contact a securities arbitration attorney at Law Office of Christopher J. Gray at (866) 966-9598 or email@example.com for a no-cost, confidential consultation.