FINRA’s Department of Enforcement investigated Goldberg and alleged he engaged in unsuitable ETF switching. Specifically, from August 2007 through February 2012, Goldberg executed 300 discretionary trades to facilitate a scheme, practice and course of business of effecting fraudulent and unsuitable short term switching of Class A mutual funds in the accounts of five customers. FINRA alleged Goldberg’s fraudulent and unsuitable short term mutual fund switching scheme involved replacing one Class A mutual fund position with another one in the accounts of the five customers more than 90 times in the five year period. Goldberg's mutual fund switching in the five customers' accounts had no business purpose other than to generate commissions and caused over $123,600 in losses to five customers while making over $77,900 for himself.
Based upon the foregoing misconduct, FINRA alleged Goldberg violated Section 10(b) of the Exchange Act, Rule 10b-5 (a) & (c); NASD Conduct Rules 2110, 2020, 2310, IM-2310-2, 2510, 3110; and FINRA Rules 2010, 2020, 2111 and 4511. Specifically with respect to NASD Conduct Rule 2310, financial advisors are required to recommend suitable investments and investment strategies to their clients (known as the suitability rule). Here, FINRA’s theory of liability involved allegations that Goldberg’s ETF switch recommendations were unsuitable for his clients – especially those who were elderly.
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 damages investing in a mutual fund with Goldberg through JP Turner or Newport, you may be able to recover your losses through FINRA arbitration. Our firm only receives a fee if you recover money. Please contact one of our attorneys at (800) 627-2179 to schedule a free consultation or complete our free case evaluator.