• August 20, 2024
• Coastal Wealth Management

Laura H. Casey (CRD#: 2684465) is a registered investment advisor with Coastal Wealth Management in New York, NY and is a previously registered broker.

Broker’s History

She entered the securities industry in 1996, and previously worked with Goldman, Sachs & Co.; The Williams Capital Group, L.P.; Bear, Stearns & Co. Inc.; Wedbush Morgan Securities Inc.; Citigroup Global Markets Inc.; Morgan Stanley; and Capitol Securities Management, Inc.

Allegations of Misconduct

According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in July 2024, Without admitting or denying the findings, Casey consented to the sanctions and to the entry of findings that she willfully violated the Care Obligation of Rule 15l-1 of the Securities Exchange Act of 1934 (Reg BI) when she bought and sold products that included sales charges in the brokerage accounts of customers, who also held advisory accounts at her member firm, without considering the comparative costs of the transactions The findings stated that Casey purchased products, including exchange-traded funds (ETFs), which required the customers to pay upfront sales charges that the customers would not have had to pay had the products been purchased in their advisory accounts. Casey then sold the securities within days of purchase, resulting in additional sales charges. In certain instances, Casey used the proceeds to make additional purchases, which resulted in additional sales charges. Casey did not have a reasonable basis to believe that placing these trades in the customers’ brokerage accounts was in the customers’ best interests in light of their intended short holding periods and the associated costs. Collectively, Casey’s trades subjected the customers to $37,757.54 in unnecessary sales charges. However, Casey’s firm identified her misconduct and reversed the transactions. As a result, the customers did not pay any unnecessary sales charges and Casey did not earn any commissions.

The findings also stated that Casey engaged in discretionary trading without written authorization. Casey effected at least 46 trades in at least seven customers’ brokerage accounts without first speaking to the customers on the date of the transactions. Casey also did not obtain prior written authorization from the customers to effect the transactions and her firm did not accept any of the accounts as discretionary.

As a result, Respondent consented to the following sanctions:
• a seven-month suspension from associating with any FINRA member in all capacities and
• a $7,500 fine.

For a copy of the disciplinary action details, click here.

Laura Casey also has one other disclosure, which includes:
• August 2022— Voluntary Resignation from MSWM, “ Allegations that representative opened brokerage accounts and transferred funds from managed accounts into the brokerage accounts without client authorization and engaged in unauthorized trading.”

For a copy of Laura Casey’s FINRA BrokerCheck, click here.

We Help Investors Recover Investment Losses

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.

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.

FINRA regulations require that a customer’s written authorization is required before a broker-dealer can carry out transactions in the customer’s account. In addition, the broker-dealer’s member firm needs to approve the broker-dealer’s authorization. These measures are intended to protect the customer. Discretionary trading allows the broker-dealer to unilaterally decide to buy or sell securities at any price and not have to check with the client first. Exercising discretion without authorization can be costly to investors, and broker-dealers and their member firms, too.

Excessive trading often occurs when a Financial Advisor puts his or her interests ahead of the clients and makes transactions solely for the purpose of generating commissions. Financial Advisors have a regulatory duty to recommend suitable investment strategies. One of the components of the suitability analysis is quantitative suitability.

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. 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.

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 mwolper@wolperlawfirm.com.