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Stu Pearl: Unauthorized Trading Complaint Against Racine Advisor
A new investor complaint against International Assets Investment Management advisor Stu Pearl (CRD# 1500833) alleges unauthorized trading. Financial Industry Regulatory Authority and Securities and Exchange Commission records show that the former David A. Noyes & Company broker is currently based in Racine, Wisconsin.
Pending Complaint Alleges 6-Figure Damages
Mr. Pearl’s BrokerCheck report discloses multiple investor complaints. The most recent, filed in October 2022, alleges that as a representative of Morgan Stanley and Citigroup Global Markets, he made unauthorized and excessive trades. The pending complaint alleges damages of $725,000. Five other complaints, filed between 2002 and 2020, detailed allegations including improper margin trading, the placement of a hedge position without the customer’s knowledge, unapproved discretionary trading, and more. These complaints reached settlements totaling more than $300,000.
FINRA Sanctioned Pearl Over ETF Sales
FINRA sanctioned Mr. Pearl in July 2021, according to another disclosure included in his BrokerCheck report. The regulator took an enforcement action against him in connection with findings that he recommended non-traditional exchange-traded funds to four clients “without having a sufficient understanding of the risks and features associated with these products and hereby having a reasonable basis to make these recommendations.” FINRA’s findings state that the customers held their positions in the ETFs for an average of 400 days and sustained about $80,000 in losses. Mr. Pearl, according to FINRA, did not conduct a “a reasonable basis suitability analysis” of the products in order to understand their features and risks, even as the products’ prospectus “warned that the products were very risky, intended to be utilized only by knowledgeable investors who understood the features and risks associated with NT-ETFs, and should be actively and frequently monitored on a daily basis.” FINRA also found that he “did not understand” that when non-traditional ETFs suffer losses, these losses “are compounded because of how the valuations reset each day.” In connection with these findings, he was issued a three-month suspension and ordered to pay a fine of $5,000.
FINRA: Pearl Based in Racine, Wisconsin
According to the Financial Industry Regulatory Authority and the Securities and Exchange Commission, Stu Pearl holds 36 years of securities industry experience. Based in Racine, Wisconsin, he has been an investment advisor with International Assets Investment Management since 2019. His previous registrations include Sanctuary Advisors, David A. Noyes & Company, Ameriprise Financial Services, and Morgan Stanley. More information about his history in the securities industry is available via his FINRA-maintained BrokerCheck report and his SEC-maintained Investment Adviser Public Disclosure. (Information current as of November 23, 2022.)
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