Securities Lawyers Blog
The investment lawyers of Gana Weinstein LLP are investigating the regulatory action brought by the Financial Industry Regulatory Authority (FINRA) against broker James Cox (Cox).
According to Cox’s Brokercheck records, he has been sanctioned by FINRA because he allegedly recommended unsuitable annuity transactions to a customer and received commissions of $25,460 in connection with the exchange. Without admitting or denying the findings, Cox consented to the sanctions and to the entry of findings. Cox was suspended from FINRA for four months and fined a total of $35,460.
In April 2017, Cox was terminated from Stifel, Nicolaus & Company, Incorporated because of a “lack of confidence after settlement of customer complaint and nondisclosure of outside business activity”
Moreover, Cox has been subject to four customer disputes.
In June 2012, a customer alleged that when the customer retired, Cox made unsuitable recommendations, made material misrepresentations, and breached his fiduciary duty. This dispute settled for $25,000.
In June 2014, a customer alleged that Cox failed to monitor the customer’s account and invested his assets in unsuitable investments. This dispute is pending.
Subsequently, In November 2014, Cox allegedly provided misleading advice to a customer who applied for two annuities to replace older annuities. This dispute settled for $480,000.
All advisers have a fundamental responsibility to deal fairly with investors including making suitable investment recommendations. In order to make suitable recommendations the broker must have a reasonable basis for recommending the product or security based upon the broker’s investigation of the investments properties including its benefits, risks, tax consequences, and other relevant factors. In addition, the broker must also understand the customer’s specific investment objectives to determine whether or not the specific product or security being recommended is appropriate for the customer based upon their needs.
A brokerage firm owes a duty to all of its customers to properly monitor and supervise its employees. The duty to supervise is a critical component of the securities regulatory scheme. Regulatory authorities such as the SEC and FINRA have steadily heightened the supervisory obligations of brokerage firms in recent years. Supervisors have an obligation to respond vigorously to indications of irregularity, often times referred to as “red flags.” A supervisor cannot ignore or disregard red flags and must act decisively to detect and prevent improper activity.
James Cox has over twenty years in the securities industry and was most recently registered with Stifel Nicolaus & Company since July 2015. Previous registrations include Sterne Agee & Leach, Securities America, Inc., and FSC Securities Corporation.
At Gana Weinstein LLP, our securities 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.