Derek Miller of Redondo Beach, California has been kicked out of the brokerage industry by the Financial Industry Regulatory Authority (FINRA).
FINRA regulates financial advisors and had launched an investigation into “unsuitable trading” by Mr. Miller. He refused to cooperate. Consequently, FINRA barred him from the securities industry.
While the legal filings regarding this settlement do not provide many clues about Mr. Miller’s “unsuitable trading,” documents filed by his former employer, Securities America Inc., do offer one significant clue. According to these documents, Mr. Miller was terminated for failure to follow sales policies and procedures regarding unit investment trusts (UITs).
UITs are an uncommon investment these days, and for good reason. Like mutual funds and ETFs, UITs are baskets of securities selected as part of a particular investment strategy. Unlike mutual funds and ETFs, once the UIT has been established, it does not generally buy or sell securities on an ongoing basis. Moreover, similar to a mutual fund’s A shares, UITs can charge hefty fees and commissions.
Perhaps the most likely explanation for FINRA’s investigation is that Mr. Miller—eager for big commissions—aggressively sold UITs to clients without first confirming that the UITs were actually a suitable investment for his investors.
If you have questions about unit investment trusts, the investment fraud lawyers at Investor Defense Law LLP may be able to help, and offer free initial consultations.
Investor Defense Law LLP is a law firm dedicated to helping investors in California, Georgia and Washington State. We sue investment advisors, brokerage firms, and financial advisors. To learn more, contact an investment fraud lawyer at 800.487.4660.