Securities Lawyers Blog
Broker Paul A. Thomas (Thomas) formerly with Lincoln Financial Advisors Corp. (Lincoln Financial) was suspended by The Financial Industry Regulatory Authority (FINRA) over allegations that Thomas engaged in unauthorized and/or improper discretionary penny stock trading, engaged in unsuitable penny stock trading, and mismarked the trade tickets for penny stock transactions as unsolicited, when they were solicited trades.
Thomas has been in the securities industry since 2000 and was employed by Lincoln Financial as a registered representative through his termination on October 14, 2011. Thomas has approximately 15 customer disputes filed against him. The vast majority of these disputes involve allegations concerning improper penny stock trading.
A “penny stock” is a security issued by a small or micro-cap company having less than $100 million in market capitalization. Penny stocks typically trade at less than $5 per share and are generally quoted on over-the-counter exchanges such as on the OTC Bulletin Board. The risks of penny stocks include the fact that they may trade infrequently. Thus, it is often difficult to liquidate a penny stock holding once acquired and at the time the investor wants to. Second, it is often difficult to find accurate quotes for penny stocks. Consequently, penny stocks often fluctuate wildly day-to-day and investors may lose their whole investment.