Essex Securities Sanctioned For Mutual Fund Switching

Essex Securities Sanctioned For Mutual Fund Switching

Essex Securities Sanctioned For Mutual Fund Switching 150 150 Rex Securities Law

11/7/2014- Essex Securities, headquartered in Topsfield, MA, with 26 branch offices , submitted a Letter of Acceptance, Waiver and Consent (AWC) to settle allegations that the firm violated FINRA rules. No. 2011025433901.

Essex did not admit or deny the FINRA findings with include:

  • From February 2010 through March 2011, an Essex broker engaged in a pattern of unsuitable mutual fund switching in the accounts of seven customers causing the customers to pay excessive commissions
  • On 29 occasions the broker recommended that customers sell mutual funds that they had owned on average less than 6 months, using the proceeds to purchase other funds causing additional commissions to  be incurred
  • The firm lacked adequate systems to monitor for unsuitable mutual fund switching since their written procedures stated that mutual funds are to be sold as long term investments with a minimum holding period of 3 to 4 years.

Essex Securities was censured, ordered to pay a $20,000 fine and agreed to review its supervisory procedures regarding the sale of mutual funds.

If you believe your broker has excessively traded mutual funds in your account contact us to learn how you may be able to recover damages.

Rex Securities Law provides nationwide representation to investors 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. Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

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