May 12, 2021
The Financial Industry Regulatory Authority (FINRA) Department of Enforcement recently approved a Letter of Acceptance, Waiver and Consent (AWC) submitted by Jeffrey Fladell, a former general securities representative and principal associated with RBC Capital Markets in Florham Park, New Jersey from October 2009 to December 2017.
According to the AWC, Fladell made unsuitable recommendations to a senior customer over 100 years old from February 2014 to August 2015, in violation of MSRB Rule G-19. This rule requires registered representatives to have a reasonable basis to believe that a recommended transaction or investment strategy involving a municipal security is suitable for the customer, based on the customer’s profile and the registered representative’s due diligence to understand the securities they are recommending.
Fladell’s customer was the trustee for two conservative trust accounts with low risk tolerance at RBC Capital Markets. From February 2014 through August 2015, Fladell’s recommendations resulted in the customer over-concentrating her portfolio in high-yield municipal bonds. In June 2015, 86 percent of one trust account and 100 percent of the other trust account consisted of these risky high-yield municipal bonds.
By signing the AWC and without admitting or denying the allegations made against him, Jeffrey Fladell consented to a three-month suspension from associating with any FINRA member in all capacities and agreed to pay a $5,000 fine. Fladell’s BrokerCheck report reveals several settled customer disputes in recent years that allege overconcentration and unsuitability of municipal bonds.