FINRA barred former Ameriprise Financial and Wedbush Securities broker Larry Martin Boggs for excessively and unsuitably trading five elderly customers' accounts while associated with Amerprise of Dallas, Texas. Regulators found that Boggs' churning resulted in monetary losses, caused his customers to incur unnecessary and excessive commission charges, and that Boggs unjustifiably modified his customers' conservative and moderate investment profiles in order to conform the customers' profiles to the high-risk and aggressive trading activity that Boggs was employing in their accounts.
AWC #2015045518901
Investigators discovered that in 2014 and 2015, Boggs (CRD #1582741) improperly changed the investment objectives and risk tolerance preferences for several of his senior citizen clients in order to conform to a high-frequency trading strategy, which Boggs then executed in their accounts without their consent, improperly exercising discretion in the accounts without written authorization to do so and without disclosure to the firm.
In its report, FINRA listed the customers' true investment profiles, noting that all had investment objectives of income and/or growth, and that each of these accounts was opened with a designation of "conservative" or "moderate" risk tolerance.
Nonetheless, Boggs purportedly increased the aggressiveness of these risk tolerances (for instance, changing one customer's "moderate" preference to "aggressive"), subsequently engaging in a highly aggressive short-term trading strategy in these retirement and IRA accounts. Boggs allegedly executed hundreds of transactions that produced customer losses, high turnover and commission-to-equity ratios, and total commissions charges between the accounts of nearly $90,000.
Investigators calculated that under Boggs' unsuitable and excessive trading strategy, these customers would have had to earn an annual return of more than 15% in order to simply break even.
As a matter of housekeeping, FINRA also charged Boggs with causing Ameriprise to maintain false books and records, citing how Boggs improperly changed his elderly clients' risk tolerance and investment objective levels in order to deceptively portray the clients as more risk-seeking than they actually were, so as to conform with his aggressive and unsuitable trading strategy.
Although Ameriprise terminated Boggs for violations of company policy on May 7, 2015, Wedbush Securities nonetheless hired him on May 27, 2015, where he remained until July 2016. Boggs' BrokerCheck file additionally lists a 2016 bankruptcy filing, which is a factor that has, in the past, motivated other financially troubled brokers to engage in prohibited activities, such as taking out unauthorized loans or drawing up an unsuitable trading strategy so as to drive up commissions and fees, all while harming the customer.
For example, FINRA recently fined and suspended former Edward Jones broker Mitchell Glenn Behm for taking out an unauthorized $180,000 loan from an elderly customer all while willfully failing to disclose a bankruptcy petition filing, answering "no" to the industry's bankruptcy question 24 times from 2009 to 2014.
If you have invested with former Ameriprise Financial and Wedbush Securities broker Larry Martin Boggs, or with any financial adviser whose unauthorized use of discretion, churning, or whose artificial manipulation of your investment objectives, risk tolerance preferences, or other account information has proven harmful to your investments or interests due to excessive and unsuitable trades occurring in your accounts, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.