- July 24, 2020
- Merrill Lynch
Cynthia Perry (CRD #4597565) is a broker at Merrill Lynch, Pierce, Fenner & Smith Incorporated in Salisbury, MD. Cynthia Perry has been in the securities industry since 2003 and previously worked at RBC Capital Markets Corporation.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), on July 6, 2020, Cynthia Perry was sanctioned by FINRA, suspending her for three months and fining her $5,000, for allegedly altering account documents previously signed by member firm customers to supply information missing from the forms. According to the FINRA sanction:
“Without admitting or denying the findings, Perry consented to the sanctions and to the entry of findings that she altered account documents previously signed by member firm customers to supply information missing from the forms. The findings stated that the altered documents included new account and distribution forms on which Perry filled in the customers’ names, addresses, account numbers, social security numbers, and cash disbursement amounts. Perry also completed a signed, but otherwise blank, annuity surrender form for another firm customer and faxed it to the issuer. The firm used the documents to open customer accounts and to authorize and record the disbursement of cash. The findings also stated that by engaging in this conduct, Perry caused the firm to maintain inaccurate books and records.”
For a copy of Cynthia Perry’s FINRA sanction, click https://www.finra.org/sites/default/files/fda_documents/2019062784701%20Cynthia%20Ann%20Perry%20CRD%204597565%20AWC%20sl.pdf
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
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