The Financial Industry Regulatory Authority has suspended a former LPL rep for one month and ordered him to pay $7,500 in fines and $7,480 plus interest in disgorgement for unauthorized transactions in the accounts of four customers — the adult daughters of a deceased elderly client.
According to FINRA's order, between September and October 2023, while associated with LPL, Barry L. Buchholz effected 11 unauthorized transactions totaling more than $590,000, generating more than $16,000 in commissions.
From October 2021 to November 2024, Buchholz was registered as an investment company and variable contracts products rep with LPL Financial.
On Nov. 29, 2024, LPL filed a Form U5 reporting Buchholz's voluntary resignation, the order states.
On Jan. 17, 2025, LPL filed an amended Form U5 disclosing that Buchholz was the subject of a customer complaint alleging unauthorized trading while associated with LPL.
In 2023, Buchholz met with a longtime customer, an 83-year-old widower, and his four adult children "to discuss his investments and estate planning," the order states.
"The longtime customer's account named the Customers as equal beneficiaries," according to the order. After their father passed away in May 2023, the daughters "each opened a nondiscretionary brokerage account at LPL, and Buchholz became the registered representative assigned to the accounts."
Once the daughters' brokerage accounts were funded with the proceeds from their father's estate, between Sept. 21 and Sept. 28, 2023, "Buchholz placed 10 trades to purchase $590,795 in mutual fund shares, generating $16,245.63 in commissions paid to Buchholz," according to the order. Buchholz did not seek or obtain written or oral authorization from the customers to place these trades.
The four daughters learned of these trades in October 2023, when they received their September 2023 account statements, the order explains.
On Oct. 27, 2023, "Customer A directed Buchholz to sell the mutual fund shares, which he did two business days later," the order continues.
On Oct. 30, 2023, "Buchholz sold all the shares held in Customer B's account without obtaining her written or oral authorization. These liquidations collectively resulted in realized losses for both customers. Customers C and D did not liquidate their mutual fund shares and ultimately saw positive returns on the investments," the order states.
"Buchholz earned $7,480 in commissions from the trades in the accounts of Customers C and D."
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