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INVESTOR ALERT—Raymond James Discharged Another Financial Advisor, Sherry Baker, For “Concerns” Relating To The Sale Of Unit Investment Trusts?

The Wolper Law Firm is currently investigating claims against Raymond James’ sales practices with regard to Unit Investment Trusts (UITs) and, specifically, the sales practices of Raymond James Financial Advisor, Shery Baker.  Shery Baker has been in the securities industry since the 1980s and, since her termination, now works for Benjamin Edwards & Co. 

According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), on November 7, 2018, Shery Baker was terminated by Raymond James due to alleged misconduct with regard to the sale of Unit Investment Trusts.  Specifically, her FINRA BrokerCheck reports disclose the basis for termination as “Discharged due to concerns relating to the nature of advisor’s UIT activity.”  These terminations follow similar terminations of other Raymond James Financial Advisors, Lynn Faust, Michael Faust, Timothy Dijak and Robert Rubarth for the same alleged misconduct. 

For a full copy of Shery Baker’s BrokerCheck report, click https://brokercheck.finra.org/individual/summary/1249220#disclosuresSection

A Unit Investment Trust is a closed-end investment company typically issues redeemable securities (or “units”), like a mutual fund, which means that the UIT will buy back an investor’s “units,” at the investor’s request, at their approximate net asset value (NAV).  A UIT typically will make a one-time “public offering” of only a specific, fixed number of units (like closed-end funds). Many UIT sponsors, however, will maintain a secondary market, which allows owners of UIT units to sell them back to the sponsors and allows other investors to buy UIT units from the sponsors.

A UIT will have a termination date that is established when the UIT is created, although it may be in the distant future.  In the case of a UIT investing in bonds, for example, the termination date may be determined by the maturity date of the bond investments. When a UIT terminates, any remaining investment portfolio securities are sold and the proceeds are paid to the investors.

A UIT does not actively trade its investment portfolio. That is, a UIT buys a relatively fixed portfolio of securities (for example, five, ten, or twenty specific stocks or bonds), and holds them with little or no change for the life of the UIT. Because the investment portfolio of a UIT generally is fixed, investors know more or less what they are investing in for the duration of their investment. Investors will find the portfolio securities held by the UIT listed in its prospectus.

Raymond James is one of several brokerage firms that is being audited by FINRA regarding the sale of UITs.  Specifically, FINRA is focused on short-term trading of UITs that have produced excessive commissions for Financial Advisors, like Shery Baker, and minimal gain for the clients.  UITs are known to produce commissions of 2%-3%, which is above-average for most securities products. 

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 is interested in speaking with clients of Raymond James, Sherry Baker, who have purchased Unit Investment Trusts.  We can be reached at 800.931.8452 or by email at mwolper@wolperlawfirm.com

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. 

Attorney Matthew Wolper

Attorney Matthew WolperMatt Wolper is a trial lawyer who focuses exclusively on securities litigation and arbitration. Mr. Wolper has handled hundreds of securities matters nationwide before the Financial Industry Regulatory Authority (FINRA), American Arbitration Association (“AAA”), JAMS, and in state and federal court. Mr. Wolper has handled and tried cases involving complex financial products and strategies ranging from traditional stocks and bonds to options, margin and other securities-based lending products, closed/open-end mutual funds, structured products, hedge funds, and penny stocks. [Attorney Bio]