FINRA’s Department of Enforcement brought a complaint against Tauzin for the following alleged misconduct. FINRA alleged that, between November 2012 and November 2014, Tauzin recommended unsuitable UIT investments to 14 households. A UIT is a type of investment that issues securities in the form of units, which represents undivided interests in a fixed portfolio of securities. Generally, UIT investments are considered long-term investments and short-term recommendations may be considered unsuitable.
Specifically, Tauzin recommended 215 UIT transactions to 14 customer households without having a reasonable basis that the transactions were suitable in view of the nature of the transactions, the frequency of the transactions, and the transaction costs incurred. FINRA alleged Tauzin recommended that the aforementioned customers hold the UIT investments for an average holding period of less than one year. According to FINRA, the transactions resulted in sales charges to the customers in the amount of $316,840.50.
Based upon the foregoing misconduct, FINRA alleges Tauzin violated FINRA Rules 2111 and 2010. FINRA Rule 2111, for example, requires financial advisors to recommend suitable investments and investment strategies to their clients (known as the suitability rule) based upon the client’s unique financial situation, including investment objectives and risk tolerance. A financial advisor also must have a reasonable basis to believe that a recommended transaction or investment strategy is suitable for the customer.
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 with Tauzin through LPL, 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.