Next Financial Group, Inc. Broker Charles Doraine Puerto Rico Bonds Losses
Posted on Wednesday, July 24th, 2019 at 9:01 pm
Did Next Financial Group, Inc. broker Charles Doraine (CRD# 70411) recommend you unsuitable Puerto Rico bonds? Doraine has been registered with Next Financial Group, Inc. in Corpus Christi, Texas since 2007.
Puerto Rico suffers from long-term financial and economic deficiencies that rendered its credit increasingly more speculative. The deterioration of Puerto Rico’s financial condition culminated in its debt being downgraded to junk status or speculative (below investment grade). For the past several years, Puerto Rico has been struggling with compounding debt and economic decline. As a result, the value of Puerto Rico’s municipal tax-free bonds has considerably fallen. Since September 2013, when the steep decline in Puerto Rico bond values began, investors holding these bonds have suffered massive losses. In May 2017, Puerto Rico filed for bankruptcy protection from creditors in what is being described as the largest municipal bankruptcy filing in history.
In May 2007, Doraine was suspended for five days and sanctioned to civil and administrative penalties and fines of $5,000 regarding findings that he effected trades in a public customer’s account pursuant to instructions from a third party who, although verbally authorized to trade the account, was not authorized in writing to execute transactions on the account.
In April 2020, Doraine was barred by FINRA after he, “Without admitting or denying the findings, Doraine consented to the sanction and to the entry of findings that he refused to provide on-the-record testimony requested by FINRA in connection with its investigation of his suspected unsuitable recommendations of short-term trading in mutual fund A shares, short-term trading of Puerto Rican municipal bonds, and overconcentration of customer accounts in Puerto Rican municipal bonds.”
Doraine has been the subject of seven customer complaints between 1989 and 2019, according to his CRD report. The recent complaint is regarding:
September 2019. “Customers allege between 2012 and 2018, RR engaged in improper mutual fund switches, recommended and sold unsuitable variable annuities, and took advantage of the diminished capacity of one of the claimants.” The customer is seeking $500,000 in this pending complaint.
September 2018. “Claimants allege that during the period 2012 through 2015, Registered Representative excessively traded bonds and mutual funds and recommended an unsuitable concentration in Puerto Rican bonds.” The customer sought $10 million in damages and the case was settled for $3.05 million.
May 2018. “Customer alleges that from October 2012 through 2017, registered representative made in and out mutual fund trades that were unsuitable for a low risk tolerance account.” The customer is seeking $2.5 million in damages and the case was settled for $375,000.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, Next Financial Group, Inc. may be liable for investment or other losses suffered by Doraine’s customers.
Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If and have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.