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Andrew Lowe: FINRA Suspends Centre, Alabama Financial Advisor
A disciplinary action taken by the Financial Industry Regulatory Authority against former Centre, Alabama broker and investment advisor Andrew Lowe (CRD# 4636118) suspended him over allegations he engaged in unsuitable trading of Class A mutual fund shares. A former representative of Dempsey Lord Smith, Lowe was suspended for nine months and ordered to pay a fine of $20,000.
According to a Letter of Acceptance, Waiver and Consent (No. 2017056130301) dated June 2018, Andrew Lowe was registered with Sterne Agee Financial Services when, between January 2012 and September 2014, he made recommendations to a total of 24 customers that they purchase Class A mutual fund shares, then liquidated “certain portions of those investments… within a short time period,” which FINRA describes as unsuitable activity. FINRA’s findings note that Class A mutual fund shares are generally accompanied by “substantial upfront sales charges” and are suitable chiefly “as long-term investments,” because investors have to hold them for significant periods of time “to account for the front-end load.” Class C shares, however, are typically suitable for short-term trading because they incur annual fees tied to the mutual fund’s average net assets rather than charging front-end loads, according to FINRA. In spite of this, Andrew Lowe allegedly undertook a strategy in which he recommended Class A mutual fund shares rather than Class C mutual fund shares because he believed they offered a higher rate of return, while Class C fees adversely impacted returns.
FINRA notes that he was aware when he recommended the investments that his customers “had short-term income needs” that would require them to liquidate, whether completely or partially, their mutual fund investments within a year, but he nonetheless recommended the Class A mutual funds shares, effecting “186 total or partial liquidations of A shares, over half of which were held for less than 12 months,” over a period of 24 months. FINRA’s findings state that these complete or partial liquidations generated about $36,180.87 in net commissions, and that he has reimbursed his clients $102,446.47 in sales charges connected to the unsuitable Class A mutual fund share recommendations. FINRA found his recommendations and transactions to constitute violations of NASD Rule 2310 and FINRA Rules 2111 and 2010. As a result of the foregoing alleged conduct, he was suspended from associating with any FINRA member firm in any capacity for nine months. He was also ordered to pay a fine of $20,000 and disgorgement of the commissions he received.
Andrew Lowe is currently not registered as a broker or investment advisor. His employment history includes Dempsey Lord Smith in Centre, Alabama; Berthel Fisher & Company Financial Services in Centre, Alabama; Sterne Agee Financial Services in Centre, Alabama; Wachovia Securities in Gadsden, Alabama; and AG Edwards & Sons in Gadsden, Alabama. He currently holds zero state licenses and has passed three securities industry qualification examinations.