Finra Suspends Ex-UBS Broker for Unsuitable Share Class Conversions
The Financial Industry Regulatory Authority on Tuesday fined a former UBS broker in California $5,000 and suspended him for two months for improperly switching clients into more expensive fund classes.Between April and May 2017, Steven P. Cooper unsuitably recommended that seven customers sell Class F mutual fund shares and purchase Class A shares of the same fund that had upfront sales charges ranging from about 2% to 3.5%. Class F shares allow conversion to Class A without upfront charges, and Cooper had no “reasonable basis” to believe that his recommendation to sell and then buy was suitable, according to a letter of acceptance, waiver and consent that Cooper signed.
Cooper, now a registered investment advisor at Steel Peak Wealth Management in Woodland Hills, Calif., which is not a Finra member firm, accepted the fine and suspension from a member without admitting or denying the findings.
The fine is effective when he reassociates with a member firm or before he seeks relief from any statutory disqualification, according to the letter.
Cooper declined to comment, and his lawyer, Robert Girard of Girard Bengali, did not return a call for comment.
The former UBS broker could have received $33,000 in commissions from the 59 A-class share purchases he recommended, but the firm pre-empted the transactions and rebilled the trades to clients without the upfront charges, the letter said.
According to the letter, Cooper’s errors may not have been intentional.
“Cooper failed to exercise reasonable diligence concerning the transactions, and therefore did not understand that the customers could have purchased the mutual funds without paying any upfront sales charges,” he said.
UBS discharged the broker in July 2017 after a review “determined that he earned commissions on certain trades that could have been entered in fee-based accounts and moved client assets into newly-opened accounts to benefit himself with no apparent benefit to clients,” according to his BrokerCheck record.
Cooper first registered as a representative with Finra in November 2010 at a Beverly Hills office of Edward Jones. He joined UBS in March 2014, the Finra database says.