Former David Lerner Branch Manager Receives FINRA Sanctions for Supervisory Lapses

Posted on June 8th, 2023 at 10:54 AM
Former David Lerner Branch Manager Receives FINRA Sanctions for Supervisory Lapses

From the desk of Jim Eccleston at Eccleston Law 

The Financial Industry Regulatory Authority (FINRA) imposed a one-month suspension and a $5,000 fine on former David Lerner Associates branch manager Rande Aaronson.

According to an Acceptance, Waiver, and Consent (AWC), Aaronson failed to properly supervise sales of interests in two illiquid oil and gas limited partnerships at his New Jersey office. From January 2015 to October 2019, Aaronson had knowledge of certain red flags but failed to investigate and respond to them adequately.

According to FINRA, Aaronson approved sales of partnerships, which the prospectuses noted carried a “high degree of risk,” even though some were being recommended to senior customers or within 30 days of a change in the customers' risk tolerance profile. Aaronson signed the FINRA's settlement letter without denying or admitting its findings.

Aaronson's actions violated FINRA's suitability rule, which was in effect during the infractions, and FINRA Rule 3110, requiring supervisors to investigate and act upon indications of potential misconduct reasonably. Those issues also triggered a violation of FINRA's catch-all Rule 2010.

 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

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