FINRA barred former Riverstone Wealth Management, Inc. broker Mark E. Marek for making unsuitable investment recommendations to a customer, the implementation of which allegedly resulted in a loss of over $598,000 in the client's account. FINRA also charged Marek with willfully providing false and misleading representations of material facts, improperly signing his customer's name on a firm document without consent and trading in an account after he was directed to cease all such activity.
According to the disciplinary proceeding, in March 2008, a 60-year-old rancher opened two accounts at Riverstone, owning an initial net worth of approximately $4.5 million ($1.7 of which was liquid) upon investing with Marek.
FINRA found that indicated on the new account forms from March 2008, the customer's investment knowledge and experience was described as "very limited" with a "conservative" risk tolerance.
FINRA alleged that despite the customer's clear tolerance designation of "conservative," Marek improperly recommended his inexperienced client invest in high-risk, illiquid private placements and volatile, high-risk exchange traded funds ("ETFs"), short selling and margin trading. Marek allegedly falsely stated to his client that these high-risk placements were in fact relatively low-risk.
From late 2008 through March 2009, trading on margin resulted in $3,030 in interest charges while short selling produced a loss of over $85,000.
FINRA produced multiple e-mails Marek allegedly sent to his customer in which Marek portrayed his investment strategy as "minimum risk and…conservative," which according to the Authority was materially false and misleading as the funds were not invested conservatively and often posed a high degree of risk.
FINRA discovered that when Marek's customer subsequently questioned Marek about the status of these investments on multiple occasions, including an e-mail in which the customer complained about losses in the two accounts, Marek again falsely stated the customer's funds were "invested in a conservative growth and income profile."
FINRA also found that Marek made exaggerated and unwarranted statements regarding yields, appreciation values and rates of return.
Finally, Marek allegedly signed his customer's name on an Account Profile/Investment Policy document without permission and when his customer directly (via e-mail) requested Marek stop all trading activity in the two accounts, Marek nonetheless and without his customer's knowledge, authorization or consent, effected the sale of 600 shares of stock in one of the accounts later that same day.
Marek consented to the discipline without admitting or denying the allegations in FINRA'S complaint.
If you invested with Mark E. Marek or with any other broker, financial advisor or representative who you believe recommended unsuitable securities, has effected excessive or unnecessary transactions, or provided false or misleading recommendations and such misconduct has proven detrimental to your financial interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.