Former Financial West Group Financial Advisor John Simoncic Barred for Unsuitable ETFs
Posted on Monday, November 12th, 2018 at 2:15 pm
Erez Law is currently investigating former Financial West Group financial advisor John Simoncic (CRD# 1062932) regarding unsuitable recommendation involving non-traditional exchange traded funds (ETFs). Simoncic was registered with several brokerage firms during the past few years:
- Financial West Group in Reno, Nevada (05/29/2014 – 11/28/2016)
- Securities America, Inc. in Solana Beach, California (10/11/2012 – 01/08/2014)
- Financial West Group in San Diego, California (11/17/2011 – 10/11/2012)
- Torrey Pines Wealth Management, Inc. in San Marcos, California (03/12/2012 – 03/29/2012)
- Torrey Pines Securities, Inc. in San Diego, California (03/15/2010 – 11/21/2011)
In October 2018, FINRA barred Simoncic after he consented to the sanction and to the entry of findings that he churned customer accounts, engaged in excessive trading, and made unsuitable recommendations involving transactions in non-traditional exchange traded funds (ETFs) in five accounts held by two customers, one of whom was a senior investor. According to FINRA, “The findings stated that Simoncic exercised de facto control over and made all trading decisions for investments in the senior investor’s IRA and the second customer’s four accounts, including which specific securities to buy and sell, the quantity of securities to buy and sell, and when to buy and sell the securities. The customers relied completely upon Simoncic to manage their accounts and to make all investment decisions on their behalf. In the senior investor’s account, Simoncic executed trades with principal values of the purchases and sales totaling approximately $1.80 million. In the second customer’s accounts, Simoncic executed trades with principal values of the purchases and sales also totaling approximately $1.83 million. Simoncic charged these customers commissions and other fees totaling approximately $79,000. In just over a two-year period, Simoncic earned approximately 88 percent of his total gross commissions solely from these customers’ accounts. Simoncic earned almost $77,000 in commissions while his customers’ losses exceeded $105,000. Simoncic’s level of trading in these accounts, which he controlled, was inconsistent with the customers’ investment objectives and their financial situations, and he did so with reckless disregard for their interests. By virtue of the foregoing conduct, Simoncic willfully violated Section 10(b) of the Exchange Act of 1934 and Exchange Act Rule 10b-5, and violated FINRA Rule 2020. The findings also stated that Simoncic did not fully appreciate or understand the products’ unique features and risks, particularly the risks associated with the daily reset of the securities. Based on the facts and circumstances of his ETF recommendations, Simoncic did not have reasonable grounds for believing that his recommendations of non-traditional ETFs were suitable for either customer.”
Simoncic has been the subject of two customer complaints between 1984 and 1997, according to his CRD report. The cases were regarding suitability and fraud and were both settled.
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, Financial West Group may be liable for investment or other losses suffered by Simoncic’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.