FINRA found that in June 2010, Boggs updated the risk tolerance in 4 investment portfolios from Moderate to Moderate/Aggressive, and changed 2 investment portfolio objectives to Aggressive. FINRA determined that the high-frequency trading strategy was unsuitable to his customer’s needs and did not match the customer’s investment portfolio objectives. By changing Ameriprise’s books and records, Boggs violated FINRA Rules 4511 and 2010.
In addition, in May 2015, Boggs’ employer, Ameriprise Financial Services, Inc. (Ameriprise Financial) discharged Boggs alleging that Boggs violated the company’s discretionary trading and suitability policies.
In January 2016, Boggs filed for bankruptcy and was also discharged. Bankruptcies are a potential sign that the advisor has difficulty managing their own finances. FINRA provides this information to the public because it is material for consumers to know whether or not their advisor’s financial situation influences the advisor’s recommendations.
Excessive trading is a violation of FINRA’s suitability rule 2111 under two standards; the broker must have control over the customer’s account and the level of activity that the broker facilitates in the account must be inconsistent with the customer’s investment objectives and needs. When brokers engage in excessive trading, the broker will typical trade in and out of securities many times over a short period of time. A commission to equity ratio is used to calculate the extent of excessive trading because brokers often excessively trade accounts for the purpose of high commissions and with little regard for customer’s profit.
Boggs was accused of excessively traded his customers’ accounts without their approval or permission. Unauthorized trading occurs when a broker sells securities without the prior consent from the investor. All brokers, who do not have discretionary authority to trade an account, are under an obligation to first discuss trades with the investor before executing them under NYSE Rule 408(a) and FINRA Rules 2510(b). Further, subsequent disclosure of the trades does not cure the violation. Unauthorized trading is a type of investment fraud because the SEC has found that no disclosure could be more important and material to an investor than to be made aware that trading is taking place. Unauthorized trading is often a gateway violation to other securities violations including churning, unsuitable investments, and excessive use of margin.
Boggs entered the securities industry in 1986. From 2015 to 2016, Boggs was registered with Wedbush Securities Inc. From October 2009 to May 2015, Boggs was registered with Ameriprise Financial. From July 2009 to October 2009, Boggs was registered with Ameriprise Advisor Services, Inc. From August 2002 to July 2009, he was a registered representative at Wells Fargo Advisors, LLC. Boggs is currently not registered with any firm.
Investors who have suffered losses may be able recover their losses through securities arbitration. The attorneys at Gana Weinstein LLP are experienced in representing investors in cases of brokerage firms failure to supervise their representatives. Our consultations are free of charge and the firm is only compensated if you recover.