South Florida Financial Advisor Pushed Clients Into Unsuitable Investments
Christopher Robert Hickman (CRD No. 3267599), a general securities broker from Delray Beach, Florida, has been suspended from the industry for five months, fined $5,000 and ordered to pay more than $115,000 in financial restitution to six different investors.
Without admitting to or denying any wrongdoing, Mr. Hickman, who is employed at Cetera Investments LLC, consented to the sanctions brought against him. According to FINRA’s Department of Enforcement, Mr. Hickman negligently recommended unsuitable investments to his clients.
The Allegations Against Registered Broker Christopher Robert Hickman
The Background
The relevant time period in this case ran from May 2011 until April of 2014. During that time, FINRA investigators believe that Mr. Hickman engaged in an unsuitable trading pattern within the accounts of six different clients. Specifically, investigators determined that Mr. Hickman purchased Unit Investment Trusts (UITS) for his clients, and then quickly flipped them in a pattern that made no sense as part of any broader investment strategy.
Most of the Recommended Financial Products Had a 24-Month Maturity Period
A Unit Investment Trust is a financial product that offers investors access to a fixed portfolio that can be redeemed after a specified period of time. Most importantly, this type of investment is only appropriate for investors with certain financial needs. When purchased, UITs should generally be held until their maturity date has passed. Yet, despite the fact that these UITs had a two-year maturation period, Mr. Hickman recommended that his clients sell them in less than four months, on average. Worse yet, in many cases, Mr. Hickman then advised his clients to invest the proceeds from their sale in other similar Unit Investment Trusts, with nearly identical investment objectives.
Investors Were Paying Large Fees for No Benefit
The UITs that Mr. Hickman was recommending to his customers came with large sales charges. In some cases, the sales charges were as high as 3.95 percent. For an investor, any sales charge or other fees that are paid to their broker or any other party are essentially lost income. Investors want to avoid paying large fees, unless there is a very clear benefit that comes along with that type of cost. In this case, investors were receiving no such benefit; they were simply forking over sales charge fees, then being moved over to other UIT and paying an additional fee. The overall strategy was not in the best interests of the investors. In total, the six customers lost $115,989.75 due to the unsuitable investment recommendations by Mr. Hickman. Full restitution with interest has been ordered to be paid by FINRA’s Department of Enforcement.
Were You the Victim of Securities Fraud?
We can help. At Carlson & Associates, P.A., our investor rights attorneys have extensive experience handling unsuitable investment claims. If you lost money due to your broker’s unsuitable investment recommendations, please contact us for immediate legal assistance. We represent wronged investors in Miami and throughout South Florida, including Broward County, Dade County and Palm Beach County.
Resource:
brokercheck.finra.org/individual/summary/3267599