Ami Forte & Charles Lawrence Barred for Churning Dementia-Laden Elderly Client's Account

Attorney Advising Disclaimer

FINRA barred Ami Kathryn Forte and Charles Joseph Lawrence for churning and exploiting an elderly customer to generate more than $9 million in commissions in less than a year, which all fell to Forte's senior citizen client who had dementia.

Settlement order #2016049321302 describes the case: broker Ami Forte (CRD #2457536) met the customer over 20 years ago and developed a romantic and business relationship with him, only to use her position of trust and confidence to later exploit him through an entity called The Forte Group (while she was associated with Morgan Stanley in Florida), and churn his brokerage accounts alongside stockbroker Charles Lawrence (CRD #3131566) by effecting more than 2,800 trades in unsuitable products and generating $9 million in commissions.

The cautionary tale is universal, as FINRA identified a common warning sign: "over half these transactions involved short-term trading in long-maturity bonds, including municipal bonds, intended for customers with long-term investment horizons."

In other words, a key red flag for potential broker misconduct occurs when that stockbroker transacts securities designed to be held for a long term and then trades them away very shortly thereafter—sometimes day trading, sometimes holding onto them for a few days or a week.

This suitability problem is compounded when the investor states investment objectives of "conservative" or "low risk" (risk averse), with an outlook or investment horizon of "long-term," as these investors can become especially vulnerable to financial abuse.

In June 2018, FINRA barred San Diego-based Independent Financial Group (IFG) broker Kyusun Kim for unsuitable recommendations in recommending elderly and retired customers liquidate their 401(k) plans and pensions in order to invest in speculative and illiquid alternate investments such as non-traded real estate investment trusts (REITs), structured notes, and other risky products.

According to FINRA, Kim's senior clients had moderate or conservative risk tolerances and suffered substantial losses as a result of the unsuitable investments.

In March 2019, the SEC joined FINRA in barring Wells Fargo broker John Schmidt of Ohio after his arrest for fraud and forgery in a Ponzi scheme targeting elderly clients, including those with diminished mental capacity, Alzheimer's and dementia.

If you have invested with such a broker who has recommended unsuitably complex or high-risk products, generated excessive commissions through massive trades and churning, or who has exploited and taken advantage of an older loved one with impaired cognition such as dementia, 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.

Related Posts
  • After $13 Million in Penalties for 'Widespread Failure,' Oppenheimer Fined $500,000 for Supervisory and Suitability Gaps Read More
  • FINRA barred former Independent Financial Group (IFG) broker Brett Arthur Hartvigson of San Diego, California for refusing to cooperate with its investigation into allegations that were part of a complaint. In 2021, while associated with IFG, Brett Harvgi Read More
  • Stifel Nicolaus Failed to Detect Unsuitable Recommendations Despite Risk Policy, Says FINRA Read More