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FINRA Sanctions Elaine LaCerte for Unsuitable UIT Sales, Causing Unnecessary Sales Charges

Former Morgan Stanley broker Elaine Diones LaCerte (Helzer) of Colorado Springs, CO received a fine and suspension into 2018 for engaging in an "unsuitable pattern" of short-term trading of Unit Investment Trusts (UITs) in over 100 customer accounts, resulting in unnecessary sales charges. In issuing the penalty, FINRA noted that LaCerte's violative conduct was unsuitable given the frequency and cost of the transactions.

AWC #2016051367201

The findings state that LaCerte (CRD #1536459) made a series of unsuitable recommendations regarding the UITs in 107 customer accounts, repeatedly recommending that customers purchase UITs and sell them "well before" their maturity dates.

As the majority of UITs LaCerte recommended had maturity dates of at least 24 months, selling the UITs early subjected customers to sales charges, which ranged from 1.95% to 3.95%.

FINRA found that the average holding period of a LaCerte-recommended UIT was less than 300 days (or less than half of the majority's 24-month+ maturity period), and furthermore discovered that LaCerte recommended over 100 times that her customers use the proceeds from the short-term sale of a UIT to purchase another UIT with identical investment objectives.

Investigators concluded that LaCerte's recommendations were unsuitable and caused customers to incur unnecessary sales charges.

LaCerte faces two pending and two settled customer complaints in her BrokerCheck file. For instance, a dispute settled for $24,464.76 in August 2016 alleged unsuitability with respect to UIT products sold from 2014 through 2016. The second 2016 complaint resulting in settlement alleged misrepresentation with respect to investment risk.

Meanwhile, the two pending disputes allege unsuitability and misrepresentation; the misrepresentation allegation alone carries a claim of damages worth $68,861.93.

If you have invested with former Morgan Stanley broker Elaine Diones LaCerte (Helzer) of the firm's Colorado Springs branch, or with any representative or financial adviser whose unsuitable recommendations in short-term trading unit investment trusts or other products wherein the short-sale effected prior to maturity has resulted in unnecessary sales charges or other damages harmful to your financial interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.

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