FINRA Fines BD for Unsuitable UIT and Closed-End Fund Transactions
FINRA fined a large broker-dealer $1.44 Million in connection with unsuitable sales of UIT and closed-end funds. According to FINRA, two rogue brokers recommended frequent switching transactions including recommendations to sell UITs and closed-end funds within one year of a recommendation to purchase. FINRA also charged the firm for allowing unsuitable margin transactions. FINRA alleged that the firm failed to respond to red flags including a trade blotter that showed an excessive number of transactions and compliance reviews questioning short-term trading.