FINRA has suspended financial advisor Ivan Shore from the securities industry for three months and fined him $5,000. Ivan Shore has been a stockbroker at Oppenheimer & Co. Inc. since 1997.
FINRA alleged that between July 1, 2011, and December 31, 2015, Ivan Shore engaged in an unsuitable pattern of short-term trading of Unit Investment Trusts in customer accounts.
If you have lost money with Ivan Shore, contact New York securities arbitration law firm Iorio Altamirano LLP for a free and confidential evaluation of your accounts.
Iorio Altamirano LLP represents investors that have disputes with their financial advisors or brokerage firms, such as Oppenheimer & Co. Inc.
FINRA’s Allegations – Shore Engaged in an Unsuitable Pattern of Early Rollovers of UITs
The specific allegations related to the elderly couple include the following:
- Between July 1, 2011, and December 31, 2015, Shore recommended his customers roll over Unit Investment Trusts (UITs) more than 100 days prior to maturity on approximately 900 occasions.
- Although Shore’s customers generally held UITs with a 24-month maturity period, Shore recommended that his customers sell their UITs after holding them for a short period and use the proceeds to purchase a new UIT.
- On average, Shore’s customers held UITs with a 24-month maturity for less than eight months (231 days).
- Of the approximately 900 early rollovers recommended by Shore, more than 240 were “series-to-series” rollovers. In other words, on more than 240 occasions, Shore recommended that his customers roll over a UIT before its maturity date to purchase a subsequent series of the same UIT.
- A subsequent series UIT generally has the same or similar investment objectives and strategies as the prior series.
- Shore’s recommendations caused his customers to incur unnecessary sales charges and were unsuitable because of the frequency and cost of the transactions.
FINRA’s Letter of Acceptance, Waiver, and Consent No. 2018057247001 also includes an example of Mr. Shore’s conduct. In the second quarter of 2013, Shore recommended that a customer purchase a UIT with an investment objective of “above-average capital appreciation” and an investment strategy of investing in a “diversified portfolio of common stocks.” The UIT had a 24-month maturity period. Notwithstanding, after holding the security only for 189 days, Shore recommended that his customer sell the UIT and use the proceeds to purchase a later series of the same UIT issued in the third quarter of 2013. The UIT purchased in the third quarter of 2013 had the same or a similar investment objective and strategy as the UIT purchased in the second quarter of 2013. Shore’s recommendation that his customer sell the first UIT approximately 17 months before its maturity and use the proceeds to buy a subsequent series of the same UIT is an example of “series to series” rollovers. These transactions caused his customer to incur increased sales charges to purchase what was, essentially, the same investment.
Unit Investment Trusts
A Unit Investment Trust (UIT) is a U.S. financial company that offers investors shares or “units” in a fixed portfolio of securities through a one-time public offering. A UIT matures on a specific date; often, after 15 or 24 months, at which point, the underlying securities are sold. The proceeds received from the sale of the underlying securities are paid to the investors. A UIT’s portfolio is not actively managed between the trust’s inception and its maturity date.
Unit Investment Trust sponsors often offer UIT product lines in successive “series.” Successive series of UITs often have the same or similar investment objectives and investment strategies as prior series.
Investors can expect to pay various sale charges and fees, including an initial sales charge, a deferred sales charge, creation and development fee, and a fee for annual operating expenses.
Oppenheimer & Co. Inc. – A Duty to Supervise
Financial institutions like Oppenheimer & Co. Inc. have a duty to supervise financial advisors and customer accounts properly. Brokerage firms must establish and maintain a reasonably designed system to oversee account activity, such as excessive trading, to ensure compliance with securities laws and industry regulations. When a brokerage firm fails to sufficiently supervise their financial advisors or the investment account activity, they may be liable for investment losses sustained by customers.
If you have lost money with financial advisor Ivan Shore or Oppenheimer & Co. Inc., contact New York securities arbitration attorney August Iorio of Iorio Altamirano LLP. August Iorio can be reached at email@example.com or toll-free at (855) 430-4010 for a free and confidential evaluation of your account.
Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. Iorio Altamirano LLP pursues FINRA claims nationwide on behalf of investors to recover financial losses arising out of wrongful conduct by stockbrokers and brokerage firms.