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Robert Foley is the Subject of a FINRA Fine After Allegedly Failing to Supervise

Mar 11, 2022 FINRA Fine

Robert Foley (CRD #: 6060234), a broker formerly registered with Wynston Hill Capital, is the subject of a FINRA fine and suspension, according to his BrokerCheck record, accessed on February 22, 2021.

Churning Allegations

According to an Acceptance, Waiver, and Consent agreement dated December 1, 2021, Robert Foley, while employed as a Wynston Hill Capital supervisor, allegedly failed to supervise two registered representatives. Due to this supervisory failure, the two brokers allegedly excessively and unsuitably traded in certain customer accounts.

What is Churning?

Churning is another term for excessive trading, which occurs when brokers execute trades simply for the sake of generating commissions for themselves, without any financial benefit for their investors. It is prohibited under FINRA Rule 2111, under "quantitative suitability." This means that the number of trades, as well as the type of trades, must fit the customer's needs. 

The alleged trading of the accounts by the Wynston Hill Capital representatives resulted in high cost-to-equity ratios. 

  • The cost-to-equity ratio measures the amount an account has to appreciate just to cover the commissions and other expenses. 

The two WynstonHill Capital representatives alleged churning and excessive trading in the customer's accounts ultimately led to charging those customers more than $300,000 in commissions and fees in less than six months and resulted in annualized cost-to-equity ratios above 100 percent.

The findings state that Robert Foley did not reasonably review orders or conduct periodic reviews to identify potentially unsuitable recommendations or excessive trading. 

What is FINRA's Failure to Supervise Rule?

FINRA Rule 3110 requires firms to maintain a supervisory system reasonably designed to achieve compliance with FINRA rules. 

Sanctions

As part of the terms of the AWC, Robert Foley consented to:

  1.  A four-month suspension 
  2. A $5,000 fine. 
  3. 40 hours of continuing education concerning supervisory responsibilities.

You can read a copy of the AWC here.

Background Information

Robert Foley has passed the following exams:

  • Series 65 - Uniform Investment Adviser Law Examination
  • Series 63 - Uniform Securities Agent State Law Examination
  • SIE - Securities Industry Essentials Examination
  • Series 7 - General Securities Representative Examination
  • Series 24 - General Securities Principal Examination

Besides WynstonHill Capital, Robert Foley has also worked with the following firms: 

  • Maxim Group (CRD#:120708)
  • Pruco Securities (CRD#:5685)
  • Metlife Securities (CRD#:14251)

Kurta Law Can Help

If you worked with Robert Foley and you have concerns about your investments, please contact us today at 877-600-0098 or info@kurtalawfirm.com for a free consultation.

For nearly 20 years, Kurta Law has advocated for investors to recover their investment losses from brokers and brokerage firms. Kurta Law is a nationally recognized law firm and exclusively represents investors against brokers and brokerage firms on a contingency basis. This means that the firm only earns a fee if our securities attorneys recover money on your behalf.