Financial Advisor IQ – Content Page
The Financial Industry Regulatory Authority says it sanctioned another broker over violations of the Securities and Exchange Commission‘s Regulation Best Interest, which has been in effect for more than three years.
The latest target is Robert Gleason Jr., who’s been in the industry since 1985 and has worked at Merrill Lynch and Raymond James, among other firms, according to BrokerCheck.
The industry’s self-regulator alleges that between July 2020 and June 2021, while he was registered with Cantella & Co. in Owensboro, Kentucky, Gleason violated Reg BI by recommending “in-and-out, short-term trading” in a customer’s account that was excessive given the investment profile of the customer — who was in her early sixties during the relevant period, had an income of $50,000 and a liquid net worth of $700,000, according to a letter of acceptance, waiver and consent published by Finra last week.
The broker, according to the industry watchdog, “failed to consider the cumulative costs of his trading.”
Those costs added up to more than $28,000 in commissions and trade fees by the customer, identified only as Customer A, even though her average account balance was around $101,000 during this period, according to the letter.
The volume of trading resulted in a cost-to-equity ratio exceeding 28% and a turnover rate of 12.93, Finra says.
Earlier this month, Gleason agreed to a three-month suspension and a $5,000 fine without admitting or denying the findings, according to the letter.
ThinkAdvisor first reported on the sanctions.
Finra has been going after brokers as well as firms over alleged violations of Reg BI, and cases related to its violations made up the fourth largest share of fines for the watchdog last year.
In February, Bill St. Louis, Finra’s chief of enforcement, said that Reg BI was “going to continue to be a priority area for us.”
