A former LPL Financial broker was suspended by the Financial Industry Regulatory Authority Inc. on Wednesday for engaging in unsuitable short-term trading of unit investment trusts as well as maintaining blank, signed forms in customer files.
The broker,
Mark Tauzin, was suspended for eight months from any Finra registered broker-dealer, fined $20,000 and required to pay $205,000 plus interest to 14 sets of clients. That sum represents the commissions he generated from November 2012 to November 2014 by buying and selling UITs, according to the Finra settlement.
Mr. Tauzin did not return a call on Thursday to comment.
Over the two year period – during the time he was registered with LPL - Mr. Tauzin recommended the purchase of UITs, which typically carry significant upfront charges, and the subsequent sales of those products within a year of purchase,
according to Finra. The UITs Mr. Tauzin recommended had maturity dates of 24 months or longer and carried initial sales charges ranging from 2.5% to 3.95%.
“Within the accounts of these 14 households, [Mr.] Tauzin effected 215 UIT transactions that were sold within a 12-month time period,” according to Finra. “The transactions resulted in sales charges to the customers of $316,840.50. At the same time, these transactions resulted in $205,115.02 in commissions to [Mr.] Tauzin. [Mr.] Tauzin had no reasonable basis to believe the short-term trading of these front-loaded products was suitable for the customers.”
Joining the firm in 2009, Mr. Tauzin was fired by LPL in November 2014, according to his BrokerCheck report. He is not registered with any firm and has one pending arbitration complaint stemming from UITs with alleged damages of $775,000, according to BrokerCheck. He also had 16 blank forms signed by customers relating to accounts from six households, a violation of the firm's written supervisory procedures, according to the Finra settlement.
(See:
Cetera broker-dealer hit with $1.1. million in fines and restitution over sales of unit investment trusts )
