FINRA’s Department of Enforcement investigated Trowbridge and found several instances of financial misconduct. First, FINRA alleges Trowbridge recommended a series of mutual fund switches in seven customer accounts without having reasonable grounds for believing that such transactions were suitable for those customers in view of the nature of the recommended transactions. According to FINRA, on at least 29 occasions, Trowbridge recommended that the customers purchase Class A mutual funds, for which they paid commissions and front-end sales charges. Then Trowbridge recommended these customers sell the Class A mutual funds within only one month to thirteen months after purchasing the securities. As a result, the customers paid approximately $60,000 in unnecessary commission for the mutual fund switches.
Additionally, FINRA alleges Trowbridge effected discretionary trades in the account of a customer, with the customer’s verbal consent, but without obtaining written authorization. To make matters worse, Trowbridge did not seek or gain Essex’s acceptance of the account at a discretionary account prior to effecting the transactions.
Based upon the foregoing misconduct, FINRA alleges Trowbridge violated several financial industry rules and regulations, including NASD Conduct Rules 2310 and 2510, IM-2310-2, and FINRA Rule 2010. Under NASD Conduct Rule 2310, financial advisors are required to recommend suitable investments and investment strategies to their clients (known as the suitability rule). Typically, a claim for unsuitable investments is brought as a form of a negligence claim with the theory: the financial advisor had a duty to recommend suitable investments; the financial advisor breached the duty with unsuitable investments; and the financial advisors unsuitable investments caused the investor damages.
Lufrano Law, LLC is a national securities litigation firm and has experience representing investors who have investment disputes with brokers and broker-dealers. If you suffered investment losses investing with Trowbridge through Essex Securities, you may be able to recover your losses through FINRA arbitration. Our firm only receives a fee if you recover money. Please complete the contact form below or contact one of our attorneys at (800) 627-2179 to schedule a free consultation.