The Financial Industry Regulatory Authority (FINRA) recently filed a complaint (Disc. Proceeding No. 2015044670801) against former Met Life Securities financial advisor Robert P. Lappin (Lappin). The underlying basis of the complaint alleged Lappin recommended unsuitable short-term unit investment trusts (UITs) in some of his clients’ accounts. Lappin settled the complaint with FINRA and accepted a three-month suspension, $5,000 fine and disgorgement of commissions.
Lappin (FINRA CRD No. 1570836) has been a member of FINRA since 1986. From 2011 to 2015, Lappin worked for New England Securities and then Met Life Securities, Inc. (“Met Life Securities”). Lappin is no longer associated with any FINRA-member; however, he remains subject to FINRA’s jurisdiction. Lappin’s FINRA BrokerCheck report discloses five customer disputes.
FINRA’s Department of Enforcement brought a complaint against Lappin for the following alleged misconduct. FINRA alleged that, between October 2012 and April 2014, Lappin recommended unsuitable UIT investments to five customers. 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, Lappin recommended 22 UIT transactions to five customers 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. According to FINRA, Lappin recommended that the aforementioned customers hold the UIT investments for an average holding period of 101 days.
Based upon the foregoing misconduct, FINRA alleges Lappin 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 Lappin through Met Life Securities, 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.