Sean Francis Sheridan, a former broker with Atlanta, Georgia based J.P Turner & Company, L.L.C., submitted an Offer of Settlement in which he consented to the entry of the Financial Industry Regulatory Authority's (FINRA) findings that he recommended and effected unsuitable mutual fund switches in customers' accounts. FINRA said that Mr. Sheridan only recommended Class A mutual fund shares to the customers, which resulted in them having to pay additional sales charges with each new purchase. In addition, Mr. Sheridan engaged in the short-term trading of mutual fund positions in the customers' accounts. FINRA also said that Mr. Sheridan recommended and effected the transactions in the customers' accounts without having reasonable grounds to believe that such transactions were suitable for the customers in view of the size and frequency of the transactions, the transaction costs incurred, and in light of the customers' financial situations, their investment objectives and needs. The customers lost a total of approximately $1,048,856, and Mr. Sheridan received commissions of approximately $267,000. FINRA further stated Mr. Sheridan failed to disclose to the customers that they could avoid a sales charge for each new Class A mutual purchase through the use of a free exchange, which was material information. Because Mr. Sheridan failed to provide the customers with the option of utilizing free exchanges, the customers paid front-end sales loads of approximately 4 to 5 percent for each mutual fund transaction. Mr. Sheridan, of Oakhurst, New Jersey, was barred from association with any FINRA member in any capacity.
In addition to the above described activity, FINRA found that Mr. Sheridan provided false information to J.P Turner & Company regarding the mutual fund transactions involving the customers. Mr. Sheridan had solicited the mutual funds, but he falsely identified those sales as unsolicited when placing the trades through the firm's electronic order entry system, which caused inaccuracies in the firm's records.
Broker-dealers must establish and implement a reasonable supervisory system to protect customers from broker misconduct. If broker-dealers do not establish and implement a reasonable supervisory system, they may be liable to investors for damages flowing from the misconduct. Therefore, investors who have suffered damages due to Mr. Sheridan's mutual fund abuse activities can bring forth claims to recover losses against J.P Turner & Company, which should have prevented Mr. Sheridan from committing the described illegal acts. Have you suffered losses in your J.P Turner & Company, L.L.C. account due to mutual fund abuse? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
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