The Financial Industry Regulatory Authority (FINRA) is the largest independent regulator for all securities firms doing business in the United States. FINRA’s chief role is to protect investors by maintaining the fairness of the U.S. capital markets.
All stockbrokers and broker dealers (brokerage firms) are required to be licensed by and subject to the rules and regulations of FINRA. Each month FINRA publishes disciplinary actions against brokers and broker dealers. Discipline can range from monetary fines and suspensions, or in extreme cases, revocation of licensing and a bar from the securities industry.
See the FINRA website for current and historical disciplinary actions.
Karen Yvonne Geiger (CRD #1456604, Registered Representative, Akron, Ohio) submitted a Letter of Acceptance, Waiver and Consent in which she was fined $15,000, which includes disgorgement of commissions received of $2,000, and suspended from association with any FINRA member in any capacity for 30 business days. Without admitting or denying the findings, Geiger consented to the described sanctions and to the entry of findings that she recommended and sold a total of $206,000 of an illiquid and high-risk alternative investment to a retired married couple. The findings stated that at the time the couple opened their securities accounts with Geiger, their main sources of income were a pensionplan and social security payments. The couple informed Geiger that they had a moderate risk tolerance, their investment objective was long-term growth, and that one customer’s investment knowledge was moderate while the other’s was limited and they indicated that they had approximately 60 percent of their net worth in retirement/pension accounts. The couple also informed Geiger that they were seeking an investment that would generate income they could use to reduce their mortgage balance. The findings also stated that Geiger recommended that the couple invest in renewable secured debentures and provided them with a company’s sales kit, which included a sales brochure and a prospectus. Geiger recommended they purchase the seven-year debentures, the longest maturity term the company offered. To help fund their purchase, the couple subsequently withdrew $76,000 in cash that had been held in a conservative IRA and invested a total of $206,000 in the debentures, which represented approximately 20 percent of their liquid net worth, which was a little more than $1 million and approximately 14 percent of their total net worth, which was approximately $1.3 million. The findings also included that Geiger distributed sales literature that contained misleading statements to the couple and other customers. The sales literature stated that the renewable secured debentures were secured by the corporate assets of the company, which consisted primarily of life insurance policies the company owned when, in fact, they were not secured by insurance policies. A table stated that the company held more than $515 million in insurance policies. However, this $515 million value was the face value of the policies and not their current value, a significantly lower number. FINRA found that as stated in the prospectus for the debentures, those policies were not collateral for the debentures and instead had been pledged as collateralfor a separate line of credit.
The suspension was in effect from September 3, 2013, through October 14, 2013. (FINRA Case #2012033508701 )
According to FINRA records Geiger is currently registered with Wall Street Strategies. She was previously registered with Regal Securities and prior to that with USA Advanced Planners, Inc.
Rex Securities Law , with offices in Boca Raton, FL, and Austin, TX, provides representation to investors nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.
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