Pending complaints against UBS Financial Services broker and investment advisor Jose Cornide (CRD# 2785918) allege the Coral Gables, Florida-based representative...Read More
Michael Gamez: Corsicana, Texas Financial Advisor Suspended
A disciplinary action taken by the Financial Industry Regulatory Authority against former Corsicana, Texas broker and investment advisor Michael Gamez (CRD# 4942235) suspended him over allegations he effected unauthorized discretionary trades. A former representative of Maplewood Investment Advisors, Gamez was fined $20,000 and suspended for one year.
According to a Letter of Acceptance, Waiver and Consent (No. 2015044086401) dated November 2018, Michael Gamez was associated with Edward Jones in Corsicana, Texas when, between January 2013 and November 2014, he exercised discretionary authority in 15 customer accounts without receiving those customers’ advance written authorization and without receiving his firm’s acceptance of the accounts as discretionary. FINRA states that he also effected “4,448 trades in 74 customer accounts without a reasonable basis to believe that the recommendations were suitable for at least some investors.”
FINRA’s findings state specifically that during the period in question, 15 customers provided Gamez with authorization “to use Unit Investment Trust or bond interest, or deposited funds, to purchase a small amount of stock” each month as a way of growing pre-existing positions. FINRA’s findings go on to state that he spoke to the customers when each month began to tell them “funds would soon become available” and to recommend possible investments “he would purchase for them later in the month.” In these instances, according to FINRA, the customers provided him discretion to choose which securities to buy out of the ones he recommended. However, according to FINRA, he did not discuss such details as how many shares he would purchase, as the transaction size was limited “in a given month” by the sum of the funds available from interest or deposited funds. FINRA states that he “did not always speak with the customers on the actual trade date” and in many instances gave them notification that he had purchased securities only after the fact. He also did not receive their prior written authorization in writing to exercise discretion, according to FINRA, which notes also that his firm had not approved the accounts as discretionary, and that its written supervisory procedures forbade discretionary accounts. FINRA found that these actions constituted violations of FINRA Rule 2010 and NASD Conduct Rule 2510(b).
FINRA’s findings go on to state that Michael Gamez recommended 4,448 unsuitable transactions in 74 customer accounts, and specifically that he did not consider such factors as “the costs of executing small share transactions in comparison to mandatory commissions imposed,” overall costs, or how all of those costs would affect the investments’ returns. As such, the transactions in question incurred “disproportionately high costs,” including 829 transactions whose commission charges were “between 30% and 50% of the principal amount,” and 686 transactions whose commission charges were more than 100% of the principal amount. FINRA found that these activities constituted violations of FINRA Rules 2010 and 2111. As a result of the foregoing alleged conduct, Michael Games was suspended from associating with any FINRA member in any and all capacities for one year. He was also ordered to pay a fine of $25,000 and disgorgement of commissions he received, totaling $73,567 plus interest.
Michael Gamez is currently not registered as a broker or investment adviser. His employment history includes Maplewood Investment Advisors, Edward Jones, and Chase Investment Services Corporation, all in Corsicana, Texas. He currently holds zero state licenses and has passed five securities industry qualification examinations.