An Arizona broker, David Joseph Escarcega, has been expelled from the industry by the Financial Industry Regulatory Authority (FINRA) for making unsuitable investment recommendations to clients.
According to InvestmentNews, between March 2012 and January 2013 Escarcega recommended debentures issued by CWG Holdings Inc to 12 clients. The debentures were apparently linked to life insurance policies and considered high-risk debt instruments.
InvestmentNews reported that 11 of the 12 clients were retired and 9 were older than 70. The majority of the clients had an investment objective was “balanced/conservative growth.” Escarcega was accused of making misleading statements to at least seven clients.
In addition to being barred from the industry, FINRA sanctioned Escarcega $52,270, the amount he earned in commissions from the unsuitable investment recommendations.
According to BrokerCheck, during the relevant time, Escarcega was a registered representative with Center Street Securities based in Phoenix, Arizona.
When brokers make unsuitable investment recommendations and squander client funds, the brokerage firm that employs them may be liable for failure to supervise and responsible for investment losses.
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