The Financial Industry Regulatory Authority (FINRA) has fined a New Jersey-based broker, of the Etter Group, who allegedly treated customers’ money like “casino chips.”
Alex Etter, of the Caldwell International Securities affiliated Etter Group, has agreed to pay a $10,000 fine and $227,000 in disgorgement along with a $6,000 reimbursement to one of his clients.
As part of a Caldwell expansion beginning in 2011, Etter and Caldwell management reaped $1 million in commissions by signing up customers willing to take speculative investment risks.
According to FINRA, Etter and other brokers acted as if once a customer elected to speculate, any investment strategy or trade would be considered suitable, treating funds in customers’ accounts as “gambling money.” When customers complained, Etter would offer commission-free trades to appease them.
FINRA accused Caldwell and its principals of failing to employ a supervisory system tailored to its business model and allowed its brokers to recommend unsuitable trades that they did not understand, causing customers to suffer significant financial losses while generating massive profits for themselves.
This case is at least the eighth in a line of FINRA enforcement actions against Caldwell.
Did you work with Alex Etter, Etter Group or Caldwell?
The attorneys at Dimond Kaplan & Rothstein, P.A. have recovered more than $100 million from banks and brokerage firms for their wrongful actions.
If you invested with Alex Etter or Caldwell, or believe your adviser violated his or her fiduciary duty by recommending unsuitable trades, you may have certain legal rights that require your immediate attention. Contact us to schedule an appointment or consultation today.