May 12, 2021
The Financial Industry Regulatory Authority (FINRA) Department of Enforcement recently approved a Letter of Acceptance, Waiver and Consent (AWC) submitted by Herbert Frey a former general securities representative most recently associated with Lincoln Douglas Investments in Mt. Vernon, Ohio.
According to his FINRA BrokerCheck report, Frey was associated with seven FINRA member firms within the last ten years. Between May 2014 and December 2017, Frey was associated with Jettrade, Inc., L.M. Kohn & Company, Lasalle St. Securities, Sigma Financial Corporation, and Landholt Securities in Cincinnati Ohio. From November 2017 to September 2018, Frey was associated with Union Capital Company in Tucson, Arizona. He was permitted to resign after allegations arose that he failed to disclose an outside business activity. Finally, from August 2018 to December 2020, he was associated with Lincoln Douglas Investments in Mt. Vernon, Ohio.
According to the AWC, Douglas excessively traded a customer’s account and placed unauthorized trades in a customer’s account between March 2018 and February 2019, while he was associated with Union Capital. These trades caused the customer to pay $135,210 in fees and commissions. Frey made $76,137 in commissions on these trades. Based on the foregoing, Frey violated FINRA Rules 2111 and 2010.
By signing the AWC, Herbert Frey consented, without admitting or denying the allegations made against him, to a 16-month suspension from associating from any FINRA member firms, a $15,000 fine, and to disgorge $76,137 in commissions, plus interest.
Frey’s FINRA BrokerCheck report reveals a customer dispute in November 2019 while Frey was associated with Lassalle St. Securities. The customer alleged that Frey was excessively trading their account since 2012, primarily through options covered call strategy. The customer requested almost $84,000 in damages and was awarded $45,000.