Florida Broker Suspended for Unsuitable Investment Recommendations
The Financial Industry Regulatory Authority (FINRA) recently announced that Daniel Joseph Hushek III (CRD #4250117), a registered broker based in Sarasota, Florida, has been suspended from the securities industry for a period of fifteen months.
According to investigators, Mr. Hushek failed to adequately supervise a representative who was recommending unsuitable investments to clients. Full information regarding this case can be found by using FINRA’s Disciplinary Actions Online tool and referencing case number: 2013035817702.
The Allegations Against Daniel Joseph Hushek III
Background
At the time that the misconduct occurred, Daniel Joseph Hushek III was employed as a general securities representative at G.F. Investment Services, LLC. While employed at this brokerage firm, Mr. Hushek was in a supervisory role. He had the professional responsibility to oversee the conduct of several different representatives, including a representative known in court documents as ‘RM’.
FINRA Regulations on Oversight
FINRA Rule 3110 compels a brokerage firm to ensure that they have proper supervisory systems in place. This is a comprehensive requirement, designed to protect customers from negligence and intentional misconduct by individual brokers. The rule puts obligations on both member firms and the supervisory personnel who are employed at these firms. Specifically, supervisory personnel have a duty to investigate any and all red flags, and to take appropriate remedial action should any misconduct take place.
The Failure to Supervise Representative ‘RM’
The relevant time period in this case was from Spring of 2011 through the Summer of 2015. During this time, ‘RM’ was working as a securities representatives at G.F. Investment Services, LLC, under the oversight of Mr. Hushek. Investigators determined that RM recommended unsuitable trades to at least 41 different investors. These transactions all involved highly risky non-traditional exchange traded funds (ETFs). In all, the 41 investors sustained more than $2.4 million in losses due to the negligent recommendations of RM.
Failure to Properly Supervise the Broker
Throughout the time period in which RM was recommending inappropriate non-traditional ETFs to firm clients, Mr. Hushek failed to take any action to correct the issue. In his role as a supervisor, he had a professional duty to uncover the misconduct, and then fix the problem. FINRA determined that there were clear red flags in this case. For example, RM was recommending that investors hold risky inverse ETFs for years at a time, despite the fact that these financial products were not supposed to be held for more than one day at a time. Further, RM was recommending these products to certain investors who had articulated that they wanted ‘conservative’ investments. Beyond the 15-month suspension, Mr. Hushek was also fined $10,000 for his failure to protect the firm’s clients.
Did Your Broker Lose Your Money?
Our law firm is here to assist you. At Carlson & Associates, P.A., our securities fraud lawyers fight for the rights of wronged investors. If you sustained losses due to your broker’s negligence, please call us today at 1-(305)-372-9700. We serve communities throughout Southern Florida, including Miami, Miami Beach, West Palm Beach and Fort Lauderdale.
Resources:
brokercheck.finra.org/individual/summary/4250117
disciplinaryactions.finra.org/Search/ViewDocument/69316
finra.complinet.com/en/display/display_main.html?rbid=2403&element_id=11345
