FINRA suspended former LPL Financial broker Mark Tauzin and ordered him to pay $225,000 in fines and disgorged commissions to 14 clients as a result of unsuitable short-term unit investment trust (UIT) trading. The report indicates the improper short-term transactions resulted in sales charges to the customers of $316,840, as well as $205,115 in commissions to Tauzin.
The regulator also cited Tauzin (CRD #1716373) for keeping signed and blank forms in his customer files in contravention of firm policy.
Investigators wrote that Tauzin unsuitably traded front-loaded UITs in the short-term without having a reasonable basis that this short-term trading recommendation could be suitable for his customers.
The findings state that from 2012 through 2014, Tauzin recommended that at least 14 accounts purchase UITs and subsequently sell the products within a year of this purchase date, even though the UITs Tauzin recommended had maturity dates of two years or longer, and carried initial sales charges that applied to the short-term sales and ranged from 3.95% to 2.5%.
With sales charges for the short-term UIT transactions and commissions to Tauzin totaling over $500,000 in charges and fees for his customers, FINRA concluded that Tauzin had "no reasonable basis" to believe that recommending the short-term trading of the front-loaded UITs was suitable for his clients.
FINRA also found that Tauzin maintained signed and blank forms including ACH authorization forms, margin agreements, account applications, and switch disclosure forms in his customer files in contravention of LPL's written supervisory procedures.
Tauzin's BrokerCheck report indicates that LPL terminated him in November 2014 for violating the firm's signature policy and over "concerns" regarding his short-term UIT trading. A pending 2015 customer dispute seeks $774,836 in damages over allegations that Tauzin engaged in unauthorized UIT trading, unsuitability, and misrepresentation.
If you have invested with former LPL Financial broker Mark Tauzin or with any broker or financial adviser whose unsuitable recommendations or improper short-term trading without a reasonable basis as to suitability has proven harmful to your investments or interests, such as through the incurrence of excessive commissions or damaging sales charges, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for investigation and consultation.