FINRA suspended ex-Stifel, Nicolaus & Co. broker Jonathon Mark Webster of the firm's Carlsbad, California branch, for recommending 19 customers, 13 of whom were seniors, buy stocks in commission-based accounts rather than in the customers' existing fee-based advisory accounts, resulting in the customers paying excess commissions that they would not have incurred had the trades taken place in the fee-based accounts.
According to the report, Jon Webster (CRD #1286778) recommended customers execute a short-term stock trading strategy he called the "January Effect," which involved buying stocks in December and selling them in January to purportedly profit from a bump in price.
In disciplining Webster, who previously worked as a broker at Wells Fargo Clearing Services in Rancho Santa Fe, California, FINRA placed its primary focus not on the short-term trading strategy itself, but on Webster's recommendation that his customers buy the stocks in commission-based brokerage accounts rather than their pre-existing fee-based accounts.
FINRA alleged that by recommending the trades in the commission-based accounts, Webster willfully violated Regulation Best Interest, finding that Webster did not have a reasonable basis to believe the transactions in the commission-based accounts were in the customers' best interests.
In total, Websters' trades in the customers' brokerage accounts resulted in $121,725.58 in what FINRA deemed "unnecessary commissions" that the customers would not have incurred had Webster bought and sold the stocks in the customers' existing fee-based advisory accounts.
Stifel, Nicolaus & Company terminated Webster in 2024 for placing trades in newly-opened commission-based accounts, as opposed to the existing fee-based accounts in which the trades should have been placed.
In 2010, Webster settled a customer dispute for $200,000 that had alleged he made unsuitable recommendations while employed at Citigroup in San Diego, CA.
According to his BrokerCheck file, Jon Webster currently serves as an investment advisor representative, a fiduciary, at Aegis Capital Corp. This is the same firm that hired the former Merrill Lynch smoothie thrower, James Iannazzo
If you invested with former Stifel Nicolaus broker Jonathon Webster or with any broker or investment adviser who unsuitably recommended short-term trades in commissions-based accounts rather than fee-based ones, resulting in excessive commission fees or other sales charges that have proven harmful to your investments or interests, 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.