FINRA fined and suspended Joseph Gunnar & Co. broker and managing director Anthony J Sica for making unsuitable recommendations to an elderly customer living on a fixed income, resulting in an overconcentration of the risky securities in the elder's account, and for unauthorized trading in a deceased customer's IRA accounts.
The first charge against Sica (CRD #1332626) concerns unsuitable recommendations regulators say Sica made to an elderly unemployed widow who was living on a fixed income with a liquid net worth of $300,000. For instance, Sica purportedly recommended this client in her 70s invest $72,000 in a microcap pharmaceutical company's IPO, even though its prospectus warned of a "high degree of risk," including "substantial doubt regarding our ability to continue [operating]."
The report states that this senior customer listed her risk tolerance as "Moderate" when she first opened an account at Joseph Gunnar & Co., but changed it to "Moderately Aggressive" because the firm required this riskier tolerance in order for her to purchase certain types of securities.
FINRA's sanction follows prior settled customer disputes filed against Sica alleging unsuitability, frequent trading, unauthorized trading, and mismanagement. In all, disputes against Sica have produced a total of nearly $600,000 in settlements over the course of Sica's registration as a broker, including an allegation of fraud, breach of fiduciary duty, and excessive trading from 1991.
The over concentration charge pertains to another "high degree of risk" investment Sica recommended, this time eliciting a $104,850 investment in a development-stage drug company, representing approximately 35% of the client's liquid net worth; both this and the microcap pharma positions were sold in the short-term for a loss.
Further speculative investments at Sica's recommendation also resulted in "substantial losses" of over $150,000, all thanks to unsuitable recommendations and overconcentration.
In regards to unauthorized trading in a deceased customer's account, FINRA found that Sica placed four purchases and seven sales of securities in the dead customer's account, resulting in losses, after Sica had already learned of the client's death, which made the trades unauthorized.
The AWC lists an additional requirement for Sica to attend and complete 10 hours of continuing education concerning suitability or dealing with senior customers.
If you have invested with Joseph Gunnar & Co.'s Anthony J Sica or with any broker or financial adviser whose recommendations were unsuitable given your investment objectives or risk tolerance preferences, or whose transactions were unauthorized, resulting in illiquid overconcentration, losses, exorbitant fees due to churning and excessive trading, or other harm to your investments or interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.