Securities Lawyers Blog
The Financial Industry Regulatory Authority (FINRA) brought and enforcement action against broker Rasheed a/k/a Richard Adams (Adams) (FINRA No. 2015045911001) resulting in a bar from the securities industry alleging that between July 2013, and June 2014, Adams engaged in unsuitable excessive trading and churning in two of his customers’ accounts. In addition, FINRA alleged that Adams willfully failed to amend his Uniform Application for Securities Industry Registration and Transfer (Form U4) to disclose 12 unsatisfied judgments and liens.
Adams first became associated with a FINRA member in 1997. From May 2002, until August 2010, Adams was associated with E1 Asset Management, Inc. Thereafter, from August 2010, until June 2011, Adams was associated with PHD Capital, Finally, from June 2011, until May 2015, Adams was associated with Caldwell International Securities out of their New York, New York office location. In 2010, Adams created and was the 100% owner of Adams Wealth Management, Inc. (AWM).
According to FINRA, from July 2013, to June 2014, Adams exercised de facto control over two customers’ accounts referred to by the initials “AD” and “PV”. FINRA found that Adams excessively and unsuitably traded and churned AD’s account and PV’s account in a manner that was inconsistent with those customers’ investment objectives, financial situations, and needs. Specifically, FINRA found Adams’ trading activity was inappropriate because it resulted in a turnover rate in AD’s account of 16.14, and a cost-to-equity ratio of 70.99% while in PV’s account the turnover ratio was 19.16 and the cost-to-equity ratio was 91.96%. FINRA found that the improper trading activity in these two accounts resulted in losses of approximately $37,000 and generated commissions of approximately $57,000.