Former RBC Capital Markets Broker, Barry Hartwyk, Suspended By FINRA For 15 Days For Allegedly Exercising Discretion In Client Accounts
Barry Hartwyk (CRD #1527583) was a Financial Advisor at RBC Capital Markets in Long Beach, California. Barry Hartwyk has been in the securities industry since 1989 and previously worked at Credit Suisse and DLJ Securities Corp.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), on June 18, 2020, FINRA sanctioned Barry Hartwyk, suspending him for a period of 15 days and fining him $5,000. According to the FINRA sanction:
“Without admitting or denying the findings, Hartwyk consented to the sanctions and to the entry of findings that he exercised discretion without written authorization or obtaining his member firm’s approval for trades in customer accounts. The findings stated that FINRA began its investigation after receiving the Form U5 filed by Hartwyk’s firm.”
For a copy of the FINRA sanction, click https://www.finra.org/sites/default/files/fda_documents/2018060409301%20Barry%20John%20Hartwyk%20CRD%201527583%20AWC%20%20jlg.pdf.
This sanction comes on the heels of RBC terminating his employment in October 2018 for allegedly violating firm policy with regard to “time and price discretion, front running, and order execution.”
In addition to the foregoing, Barry Hartwyk has four customer complaint disclosures against him during his career, alleging sales practice misconduct. Among the complaints against him include the following:
• May 2004—”CLIENTS’ CLAIM INCLUDES ALLEGATIONS OF MISREPRESENTATION AND OMISSION, UNSUITABILITY, OVER-CONCENTRATION, CHURNING, BREACH OF FIDUCIARY DUTY, BREACH OF CONTRACT AND NEGLIGENCE.” The matter was settled for $49,000.
• May 2004—”CLAIMANTS’ CLAIM INCLUDES ALLEGATIONS OF MISREPRESENTATION, OVER CONCENTRATION, UNSUITABILITY, CHURNING, BREACH OF FIDUCIARY DUTY, BREACH OF CONTRACT AND NEGLIGENCE.” The matter was settled for $315,000.
• March 1998—”THE CLIENT ALLEGED THAT THE CONCENTRATION OF SHARES ACCUMULATED IN A CERTAIN SECURITY RESULTED IN POOR ACCOUNT PERFORMANCE.” The matter was settled for $53,000.
For a copy of Barry Hartwyk’s CRD, click https://brokercheck.finra.org/individual/summary/1527583#disclosuresSection
Unauthorized trading is strictly prohibited by FINRA rules. Before a transaction can be entered in a customer account, the Financial Advisor must first obtain verbal or written authorization from the client. In the absence of authorization, the transaction is subject to rescission by the customer.
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:
• Other investments
• Financial situation and needs
• Tax status
• Investment objectives
• Time horizon
• Liquidity needs
• Risk tolerance
• Any other information disclosed by the customer
The Wolper Law Firm represents investors nationwide in securities litigation and arbitration on a contingency fee basis. Matt Wolper, the Managing Principal of the Wolper Law Firm, is a trial lawyer who has handled hundreds of securities cases during his career involving a wide range of products, strategies and securities. Prior to representing investors, he was a partner with a national law firm, where he represented some of the largest banks and brokerage firms in the world in securities matters. We can be reached at 800.931.8452 or by email at firstname.lastname@example.org.
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