The Financial Industry Regulatory Authority (FINRA) suspended broker James A. Owen of Easton, Pennsylvania and ordered him to pay a total of nearly $330,000 in restitution and fines after finding Owen:
- Arranged for 16 customers to open accounts at online trading brokerage firms;
- Conducted high-risk options trading in twelve of those accounts on behalf of the customers;
- Failed to fully understand or communicate the potential risks of the options trading he conducted;
- Failed to disclose the option trading activities to his employing member firm;
- Failed to disclose that he was a registered representative to the on-line trading firms where the 16 accounts were held;
- Engaged in discretionary trading without written authorization of the clients; and
- Induced the customers to falsify their investment experience on new account forms they filled out when they opened their accounts
Owen did not oppose the FINRA findings and discipline, but accepted FINRA'S findings and discipline to resolve the matter.
At Owen's instruction, the customers falsely stated on applications that they had significantly more experience trading options than what was accurate. Some of Owen's customers set up automated withdrawals from their options trading accounts to fund the purchase of insurance products through Owen. Nine of the customers borrowed money from their 401(k) plans to participate in Owen's trading.
Owen traded credit spreads on indexes such as the NASDAQ-100, Russell 2000, S&P 500 and S&P 100. In the end, Owen's customers lost a total of $313,981, an average of 42% of the monies they invested through him.
FINRA ordered Owen to repay the losses, plus interest. Owen, who according to his BrokerCheck Report is also a Certified Financial Planner and employed as a pilot by Continental Airlines, was suspended from association with FINRA member firms through June 3, 2014.
If you invested with James A. Owen or any broker or firm whose advisement included an encouragement to falsify documents or whose own failure to fully understand certain securities principles or instruments has proven harmful to your investments, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.