October 20, 2020
The Financial Industry Regulatory Authority (FINRA) Department of Enforcement recently approved a Letter of Acceptance, Waiver and Consent (AWC) submitted by Robert Meyer, a Monmouth Capital Management LLC general securities representative and principal, to resolve alleged violations of security industry rules by excessively and unsuitably trading two customers’ accounts.
Meyer has been registered with Monmouth Capital Management LLC (MCM) in Holmdel, New Jersey since July 2018 as well as Monmouth Advisory Services LLC since January 2020. According to his FINRA BrokerCheck report, Meyer has been associated with six other FINRA member firms since obtaining his securities license. Within the last ten years, he has been associated with Chelsea Financial Services and Woodstock Financial Group, Inc. in Colts Neck, New Jersey from July 2009 to November 2013 and November 2013 to April 2017, respectively, and Monmouth Advisory Services, LLC in Red Bank, New Jersey from October 2018 to December 2019.
FINRA staff asserts in the AWC that between January 2019 and August 2019, Meyer excessively and unsuitably traded two customers’ accounts. FINRA alleges that Meyer recommended numerous trades that resulted in excessive commissions and high annualized turnover rates. The first customer was a retired individual who opened an account at MCM with $39,000. Meyer’s recommendations between March and August 2019 allegedly caused this customer to pay $10,462 in commission and resulted in an annualized turnover rate of 42 and annualized cost-to-equity ratio of over 150 percent. This means the amount of securities bought and sold in the account were 42 times the value of the account and that the account would have to have returns in excess of 150 percent to make any money. The second customer identified in the AWC was a 42-year old individual that opened an account at MCM with approximately $104,000 in January 2019. In only three months since activating the account, Meyer recommended trades that caused the customer to pay nearly $15,000 in commissions and resulted in annualized turnover rate and cost-to-equity ratio of 17 and 50 percent, respectively. These customers suffered collective losses of $53,183.
Based on the foregoing, Robert Meyers violated FINRA Rule 2111 and 2010. Without admitting or denying the allegations made against him, Meyers consented to a 3-month suspension from associating with any FINRA member firm and a $7,500 fine. He also agreed to pay restitution totaling $25,030 to the two customers and take 20 hours of continuing education concerning FINRA’s suitability rule.
Meyers has a history of regulatory disclosures. Within the last ten years, Meyers was fined $7,500 for failing to supervise a registered representative and failing to comply with a heightened supervision agreement between the registered representative and the Montana Commissioner of Securities and Insurance. Meyers was also fined $5,000 by the New Jersey Bureau of Securities in 2014 for acting as an unregistered securities agent while transacting business with customers.
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