FINRA barred former Sagepoint Financial, Inc. broker Daryl Richard Lemon of Los Angeles, California for inappropriately "managing" an elderly investor's discount brokerage account and periodically charging her fees associated with 1,236 transactions.
Lemon worked out of Sagepoint Financial's Culver City, CA branch.
According to the investigation, Lemon in 2009 first took charge of a discount brokerage account belonging to a senior client (born in June 1929) at a third-party firm, having suggested to the elderly investor that he "manage" her discount brokerage account. The customer's husband had died in March 2001 and, according to industry documents, there was "virtually no account activity after his death."
Nonetheless, FINRA's report states that after he took over in 2009 and continuing through 2011, Lemon accessed the discount brokerage account online over 1,000 times and effected 1,236 total transactions, including 621 purchases totaling approximately $23.5 million and 615 sales totaling nearly $23.3 million, collectively totaling $46.8 million.
The findings state that Lemon periodically charged his elderly customer "advisory fees" on these 1,236 transactions.
FINRA also concluded that Lemon engaged in this "management" activity without providing any notice at all to Sagepoint Financial.
According to Lemon's BrokerCheck Report, the elderly client filed a civil suit in the Los Angeles Superior Court alleging $57,699 in damages due to unsuitable recommendation of margin, excessive fees and investment losses. The lawsuit was settled for $40,000.
Prior to his discharge from Sagepoint Financial for failing to report funds received from a client not related to any account or business at the firm, Lemon was terminated by Prudential Securities in 1998 for violating Securities Exchange Act regulations by signing the name of a customer on a letter of authorization for transfer of assets. In 2000, the New York Stock Exchange sought and received a three-month suspension.
If you have invested with former Sagepoint Financial broker Daryl Richard Lemon or with any broker, financial advisor or securities representative whose excessive trading activity, use of discretion or margin, excessive fees or other inappropriate/unauthorized activity in your investment account has proven harmful to your financial interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for investigation and consultation.