May 12, 2021
Former registered representative Charles Bonilla recently consented to sanctions imposed by the Financial Industry Regulatory Authority (FINRA) Department of Enforcement to resolve allegations of unsuitability and failing to conduct due diligence before recommending investments to his customers.
Bonilla has been associated with three FINRA member firms in the last ten years. He was associated with Scottrade, Inc. in Aventura, Florida from January 2008 to January 2015. Bonilla was discharged after the firm alleged that he engaged in outside business activity without obtaining prior written approval from the firm. Bonilla was also associated with David Lerner Associates, Inc. from December 2015 to May 2018 and Pruco Securities LLC from May 2018 to February 2019. Both firms are located in Boca Raton, Florida.
According to the Letter of Acceptance, Waiver, and Consent (AWC), Bonilla recommended that his customers invest in energy sector securities between December 2015 and December 2017 without conducting prior due diligence to believe that the investments were suitable for his customers. Bonilla created a mutual fund for customers at David Lerner Associates that sought to reach its investment objective by investing at least 80% of its net assets in various securities and other assets in the energy sector. FINRA asserts that Bonilla did not understand the details or risks associated with the fund prior to recommending it to his customers, nor did he know how the fund was performing or how the fund paid its monthly distributions. In fact, the fund’s net asset declined by over 40% during the fund’s initial public offering period. Based on the foregoing, Bonilla violated FINRA Rules 2111 and 2010. Bonilla consented to a five-month suspension from associating with any FINRA member firm in all capacities, a $5,000 fine, and to disgorge $22,417.03 he made in commissions on the sales, plus interest.