The Financial Industry Regulatory Authority barred an ex-Hilliard Lyons rep from associating with any FINRA member in any capacity after he declined to cooperate with the regulator’s investigation into several customer complaints that he conducted trading in clients’ accounts without their permission and made unsuitable investments, according to the regulator.
Without admitting or denying the findings, Christopher Duke Bennett signed a letter of acceptance, waiver and consent June 15 in which he agreed to FINRA’s sanction. FINRA accepted the letter Friday.
Bennett was a rep with Hilliard Lyons from 1995 until October 2018, when “Bennett terminated his registration” with the firm, according to FINRA.
Baird, which purchased Hilliard Lyons in 2019, and Andrea Greene Wells, a principal at the law firm Bressler Amery & Ross, who represented Bennett in the dispute with FINRA, did not immediately respond to requests for comment on Tuesday.
During Bennett’s time with Hilliard Lyons, there were 15 customer complaints involving him, according to FINRA’s BrokerCheck website, which shows he is no longer registered as a broker or RIA.
The first complaint, in which a client alleged poor account performance, was denied in 2016. However, the one after it resulted in $445,000 in damages being granted in arbitration to the customer, whose daughter complained of unauthorized and unsuitable trades. Eight other customer complaints were settled and five are still pending. Nearly all of them involved claims of unsuitable and/or unauthorized trading.
On Jan. 23, 2019, F1NRA started an investigation in response to an amended U5 form filed by Hilliard Lyons on Jan. 22, 2019, which identified a customer complaint alleging that Bennett had conducted trading in a client’s account without her permission, according to the FINRA AWC letter.
FINRA’s investigation of Bennett expanded to include additional claims by other customers alleging similar misconduct, as well as allegations of unsuitable recommendations, the regulator said.
In connection with its investigation, on March 27, 2020, FINRA staff sent a request to Bennett for the production of documents and information, it noted. The deadline to respond to that request was May 15. However, as his counsel stated to FINRA staff during a telephone call on May 14, and by the AWC agreement, Bennett acknowledged that he received FINRA’s request but would not produce the documents and information at any time, according to the AWC letter.
By refusing to produce information and documents as requested pursuant to FINRA Rule 8210, Bennett violated that rule and Rule 2010 (governing standards of commercial honor and principles of trade), according to the regulator.
— Check out Why Brokers Must Testify — Or Else on ThinkAdvisor.