Cetera Advisors Financial Advisor Ronald Whittingham Fined and Suspended by FINRA After Allegations Of Unsuitable Investments Resulting in Investment Loss
Ronald Whittingham (CRD#: 4175525) is a dually registered Broker and Investment Advisor at Cetera Advisors, LLC in Orland Park, IL.
He entered the securities industry in 2000 and previously worked for Opus Wealth Management Group; LPL Financial, LLC; FSC Securities Corporation; Advice Network Consultants, LLC; LPL Financial, LLC; and LaSalle St. Securities, LLC.
Current And Past Allegations Of Conduct Leading To Investment Loss
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in October 2021, FINRA sanctioned Ronald Whittingham, levying a civil and administrative penalty of $5,000, and suspending him from all capacities for three months beginning November 15, 2021 and ending February 14, 2022. The FINRA sanction states, “Without admitting or denying the findings, Whittingham consented to the sanctions and to the entry of findings that he falsified variable annuity replacement disclosure forms that he submitted to his member firm. The findings stated that on each form, Whittingham stated, falsely, that gaining a stepped-up death benefit was one of the reasons that the variable annuity exchange was suitable for the customer. In fact, as Whittingham knew, each variable annuity that was to be replaced had a stepped-up death benefit that, unbeknownst to the firm, was removed at Whittingham’s recommendation immediately prior to the time he recommended the variable annuity exchange. Whittingham recommended to his customers that the death benefits be removed from the existing variable annuities in order to make his recommended exchanges look to the firm as though they were more advantageous to the customer than they were, even though each of the forms identified other, accurate reasons why each exchange was suitable for the customer. The findings also stated that Whittingham caused the firm to maintain inaccurate books and records.”
For a copy of the FINRA sanction, click here.
Ronald Whittingham has no additional disclosures.
For a copy of Ronald Whittingham’s FINRA BrokerCheck, click here.
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Financial advisors have a legal and regulatory obligation to recommend only suitable investments that are appropriate for their clients’ needs and objectives. Their employing brokerage firm has a legal and regulatory obligation to supervise the financial advisors’ sales practices and dealings with clients. To the extent any of these duties are breached, the customer may be entitled to a recovery of his or her investment losses.
Reasonable basis suitability requires that a recommended investment or investment strategy be suitable or appropriate for at least some investors. Reasonable basis suitability requires an advisor to conduct adequate due diligence so that he or she can determine the risks and rewards of the investment or investment strategy.
Quantitative suitability requires a brokerage firm or financial advisor with actual or de facto control over a customer’s account to have a reasonable basis for believing that a series of recommended transactions – even if suitable when viewed in isolation – is not excessive and unsuitable for the customer when taken together in light of the customer’s investment profile. No single test defines excessive activity, but factors such as the turnover rate, the cost-equity ratio, and the use of in-and-out trading in a customer’s account may provide a basis for a finding that a member or associated person has violated the quantitative suitability obligation.
Customer-specific suitability requires that a member or associated person have a reasonable basis to believe that the recommendation is suitable for a particular customer based on that customer’s investment profile. Among the criteria that a financial advisor must evaluate to satisfy his or her customer-specific suitability obligations include the investor’s age, tax status, time horizon, liquidity needs, and risk tolerance; a client’s other investments, financial situation and needs, investment objectives, and any other information disclosed by the customer should also be considered.
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