Gary Dodds, a stock broker for Raymond James Financial Services, conducted churning, a method of excessive trading to receive additional commissions, on several of his clients’ accounts from 2016 to 2018, the agency said.
The division’s investigation revealed Dodds made unsuitable recommendations and sales of securities for his clients and failed to maintain proper documentation of his trading activities. The division also said it learned that Raymond James Financial Services was aware of his actions, but did not take adequate corrective steps.
Under Oregon law, securities professionals can be held liable for financial exploitation of vulnerable people and investment firms are expected to supervise their representatives to prevent churning and similar violations.
The division issued a cease-and-desist order and assessed civil penalties of $100,000 against Dodds. As part of the order, Dodds agreed to not apply for any financial services license or registration in Oregon for five years.
A civil penalty of $120,000 was also assessed against Raymond James Financial Services, and the company agreed to provide restitution to five Bend-area seniors totaling $123,379.
“Securities and financial professionals first concern should be the customer, not the commission,” said Division of Financial Regulation Administrator TK Keen. “Investment firms also have a duty to supervise advisors in a way that prevents churning, excessive trading and other violations of Oregon law.”
The division has three tips to help Oregonians avoid these types of fraudulent activities:
- Be aware of all activities in your accounts, especially when trades made on your behalf provide commissions.
- Find out if your securities professional is a fiduciary. A fiduciary must act in your best interest at all times. Visit the division’s choosing a financial professional website to learn more and to check a license.
- Ask questions. It is important to learn about all commissions, fees, and costs associated with buying, selling, and servicing your investment accounts.
To learn more about financial services, investments, and protecting yourself from fraud, visit the division’s financial services for consumers page.
The outcome of this investigation is an example of what can happen when people report possible financial exploitation of a senior. Oregon Adult Protective Services reported the incident, which prompted the division’s investigation. The division encourages everyone to report potential financial exploitation of vulnerable people by visiting its protect yourself and others from fraud website.
If you need to report financial exploitation or file a complaint on a
financial services company or professional, call the division’s
advocacy team at 888-877-4894 (toll-free) or email firstname.lastname@example.org.