FINRA Sanctions Steven Cooper for Unsuitable Share Class Conversions

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Broker Steven Paul Cooper, formerly of UBS Financial Services' Century City, CA branch, consented to FINRA's findings that he recommended and made a series of unsuitable mutual fund trades in several customers' accounts, exposing clients to tens of thousands of dollars in potential sales charges as a result.

In describing Cooper (CRD #4879645)'s 2017 trades as unsuitable recommendations made without a basis to believe the trades were appropriate for his customers at UBS, FINRA in AWC #2017055083601 wrote that Cooper failed to exercise reasonable diligence in recommending mutual fund transactions with upfront sales charges that his customers could have avoided.

FINRA's original March 2019 investigation alleged that Cooper "earned commissions on trades that could have been entered without charging a commission and were therefore unsuitable." The May AWC did not contain any references to commissions, but instead discussed only "upfront sales charges."

According to the report, Cooper recommended his UBS customers sell Class F shares and use the proceeds to purchase Class A shares of the same mutual funds subject to upfront sales charges ranging from 2% to 3.5%, instead of taking advantage of a provision that would have allowed customers to convert Class F shares into Class A shares without paying the upfront sales charges.

The investigation revealed that UBS Financial Services fortuitously cancelled and rebilled stockbroker Cooper's trades, meaning the customers affiliated with the 59 unsuitable purchases were saved from incurring approximately $33,000 in sales charges.

UBS terminated Cooper in July 2017 after a firm review determined that he earned commissions on trades that could have been entered in fee-based accounts (instead of commission-based accounts), and because Cooper allegedly moved client assets into newly-opened accounts to benefit himself, with no apparent benefit to his clients.

According to his file, Steven Cooper, who also serves as a licensed insurance agent with Steel Peak Wealth Management in Woodland Hills (joined in August 2017 after his discharge from UBS one month prior), previously was associated with Edward Jones of Beverly Hills from 2010-2014, upon which time he first joined UBS.

Perhaps the best warning comes from Cooper's detailed BrokerCheck file itself, which states, in reference to his Steel Peak Wealth Management business activity: "Clients should be aware that these services pay a commission and involve a possible conflict of interest, as commissionable products can conflict with the fiduciary duties of a registered investment adviser."

If you have invested with former UBS Financial broker Steven Paul Cooper or with any financial adviser or representative who failed to act in your best interest by recommending an unsuitable transaction—such as selling and purchasing mutual fund shares that subjected you to unnecessary upfront sales charges, commissions, or fees—or whose failure to conduct reasonable due diligence in connection with a conflict of interest has proven harmful to your investment accounts, please call an experienced FINRA arbitration attorney at The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.