According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Stephanie Murray (Murray), previously associated with Commerce One Financial Inc., has at least 2 disclosable events. These events include 2 tax liens, alleging that Murray recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a final customer complaint on January 22, 2025.
Respondent Murray failed to pay fines and/or costs of $4,878.14 in FINRA Case #2021072336101.
FINRA BrokerCheck shows a final customer complaint on August 19, 2024.
Without admitting or denying the findings, Murray consented to the sanctions and to the entry of findings that she shared commissions that were generated from securities transactions with an unregistered person. The findings stated that the unregistered person was involved in the sale of convertible debt on behalf of two companies. In connection with those transactions, those companies paid Murray’s former member firm finder’s fees totaling approximately $26,000, from which the firm paid Murray commissions totaling $9,375. Murray then paid the commissions to the unregistered person, whom Murray knew had previously been barred by FINRA from associating with any FINRA member in any capacity. The findings also stated that Murray caused another former firm to maintain inaccurate books and records and to file inaccurate FOCUS reports. Murray, as the firm’s FINOP, failed to properly record the firm’s expenses on the firm’s general ledger and prepared inaccurate monthly FOCUS reports. The firm operated with an Expense Sharing Agreement (ESA) that it had entered into with its parent company. Pursuant to the ESA, the firm was required to pay approximately one-third of the shared expenses incurred. However, the firm did not record or pay its share of the expenses incurred under the ESA and instead made only limited payments to its parent company in arbitrary amounts. Murray did not reasonably ascertain the firm’s share of expenses that were due under the ESA and record them accurately on the firm’s general ledger. Murray then relied on the firm’s inaccurate general ledger to prepare the firm’s monthly FOCUS reports. Because the general ledger was inaccurate, the FOCUS reports were also inaccurate.
Brokers are required to adhere to the SEC’s Regulation Best Interest (Reg BI) standard of care under the Securities Exchange Act of 1934 which establishes a ‘best interest’ standard for broker-dealers and associated persons. Reg BI applies when brokers recommend a retail investor engage in securities transaction or an investment strategy involving one or more securities. Reg BI also applies to financial advice concerning the transfer of funds and opening of accounts. Reg BI is drawn from fiduciary principles that include an obligation to act in the retail investor’s best interest and the broker is prohibited from placing their own interests ahead of the investor’s interest.
There are several different aspects of the rule that brokers must comply with. One of which is the care obligations which requires brokers to form a reasonable belief that their investment advice and recommendations are in the retail investor’s best interest. The care obligations includes three components. First, the advisor must have an understanding of the potential risks, rewards, and costs associated with a product, investment strategy, account type, or series of transactions. Next, the advisor must have a reasonable understanding of the specific retail investor’s investment profile. The customer’s profile information generally includes an investor’s financial situation and needs; investments; assets and debts; marital status; tax status; age; investment time horizon; liquidity needs; risk tolerance; investment experience; investment objectives and financial goals; and any other information the retail investor may disclose in connection with the recommendation or advice. Using the foregoing information, the associated person then must consider reasonably available investment option to accomplish the investor’s goals as well as alternative investment options that may be cheaper or other important qualities. Finally, the advisor must conclude that there is a reasonable basis to believe that the recommendation being provided is in the investor’s best interest.
Brokerage firms and advisors must also understand the features and limitations of various account types as part of meeting Reg BI’s care obligations. Firms typically offer a variety of account options and services with different trading costs, services, such as account and activity monitoring. An advisor’s recommendation as to what type of securities account to open can alter the customers’ overall costs and investment returns. The advisor must determine that the client can benefit from the type of account being recommended to be opened and in the investor’s best interest taking into account the costs, benefits, and needs of the client.
Murray has been in the securities industry for more than 14 years. Murray has been registered as a Broker with Commerce One Financial Inc. since 2015.
Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation. At Gana Weinstein LLP, our attorneys are experienced representing investors who have suffered securities losses due to the mishandling of their accounts. Claims may be brought in securities arbitration before FINRA. Our consultations are free of charge and the firm is only compensated if you recover.