Florida Brokerage Firm Fined, Censured for Failure to Maintain Proper Supervisory System
In December of 2019, the Financial Industry Regulatory Authority (FINRA) sanctioned International Assets Advisory, LLC (CRD No. 10645)—an Orlando, Florida-based broker-dealer that operates nationwide—for its failure to implement and maintain an adequate supervisory system (FINRA Case #2017056579501).
International Assets Advisory was fined $30,000 and ordered to pay more than $92,000 in financial restitution for its failure to supervise one of its representatives. That financial advisor caused avoidable customer losses through unsuitable investment recommendations.
Failure to Supervise: Unsuitable Investment Recommendations
The disciplinary action brought against International Assets Advisory pertains to its failure to supervise financial advisor Robert James D’Andria (CRD No. 1916172). Mr. D’Andria was recently suspended from the securities industry for two months and ordered to pay a $5,000 fine for making unsuitable investment recommendations to clients. According to FINRA, this broker pushed investors into complex exchange traded funds (ETFs) without reasonable consideration towards their level of risk tolerance or their overall investment profile.
In the case against Mr. Robert J D’Andria, regulators explicitly noted that his member firm, International Assets Advisory, acted in a negligent manner (FINRA Case #2017056579502). Beyond its failure to supervise its financial advisors, the agency also determined that the brokerage firm did not properly train its representatives before allowing them to offer certain complex financial products to retail investors.
Investor Losses in Complex, Non Traditional Exchange Traded Funds (ETFs)
Under FINRA Rule 2111, financial advisors must have a reasonable basis for recommending financial products and trading strategies. While individual securities representatives are responsible for following industry regulations, brokerage firms also have a duty to supervise these professionals. FINRA determined that International Assets Advisory failed to live up to this duty.
Registered representative Robert James D’Andria was selling non-traditional ETFs to customers. According to FINRA’s findings, he offered these risky products to investors without making a proper suitability determination. Further, he also advised investors to sell these products too frequently to be sensible. International Assets Advisory’s lack of a proper supervisory system meant that it failed to pick up on these unsuitable investment recommendations. In total, investors sustained more than $90,000 in losses in these risky ETF products.
Without admitting to or denying any of the allegations raised by FINRA, International Assets Advisory consented to the agency’s findings and proposed penalties. Among other things, this includes a $30,000 fine and payment of $92,805.13 in restitution to affected investors. Additionally, the Central Florida brokerage firm agreed to update its written supervisory protocols to ensure compliance in the future.
Call Our Miami, FL FINRA Arbitration Attorneys for Immediate Assistance
At Carlson & Associates, P.A., we fight to protect the financial interests of our clients. If you suffered damages due to a brokerage firm’s failure to supervise, our Miami investment fraud attorneys are here to help. To set up a strictly private review of your case, please call us now. With an office in Miami, we represent investors throughout Florida.