A Pinehurst stockbroker has been barred by the Economic Market Regulatory Authority for earning unsuitable financial commitment recommendations to aged clients.
Mercer Hicks III proposed various “high-danger, illiquid investments” to five women from June 2014 to July 2017, in accordance to the penned summary of a disciplinary hearing held by FINRA in May well. Most of the prospects have been in their 80s and “not economically refined,” the regulator reported.
The women invested almost $665,000 primarily based on recommendations from Hicks, who netted a lot more than $38,800 in commissions. He has been purchased to disgorge the “ill-gotten gains” to FINRA and ought to also shell out in excess of $7,600 in prices involved with the disciplinary hearing.
FINRA began investigating Hicks immediately after the nephew of a 90-12 months-aged Whispering Pines lady contacted the corporation with issues about two non-traded Real Estate Investment decision Trusts that his aunt experienced invested in. These products vary from publicly traded REITs, which can be purchased and bought with relative ease on a inventory exchange.
When the nephew tried using to sell shares of the non-traded REITs to assist pay for his aunt’s nursing house treatment, he realized that her $50,400 investments could not be easily converted into income. An financial commitment in a non-traded REIT can choose much more than 10 yrs to develop into liquid, in accordance to FINRA.
A FINRA examiner afterwards established that Hicks had designed related recommendations to 3 other senior women in Pinehurst, where he labored at a branch of the brokerage organization Southeast Investments, and to a woman in Burlington.
3 of the buyers, whose entire names were being not introduced by FINRA, lived in prolonged-term treatment services. A person of them died in 2019.
In its disciplinary ruling, FINRA wrote that Hicks, a veteran broker with 48 several years of practical experience, had a “seriously flawed” knowledge of the dangerous investments he was recommending. He informed investigators he had go through only a number of internet pages of the prospectus for a non-traded REIT and assumed that his shoppers would get an “annual earnings of 6 per cent of their investment.”
Even now, FINRA concluded that Hicks’ “lack of intent to hurt his prospects is not a relevant mitigating aspect.”
“It does not cut down the bodyweight of the aggravating factor of the sophisticated ages of the prospects, which we should take into account,” FINRA wrote, including that Hicks’ recommendations recognized a “clear pattern” of misconduct. “It does not erase the simple fact that Hicks’ misconduct, even if he did not intend it, harmed his prospects.”
The regulator mentioned that Hicks employed the “directories of citizens of retirement communities in and around Southern Pines to discover likely prospects and then to introduce himself to them by building chilly calls.”
Following FINRA’s choice to bar him from the field, legal professionals in New York, Florida and other states built online posts featuring free lawful consultation to his former buyers.
Hicks was dismissed by two brokerage corporations for plan violations ahead of he joined Southeast Investments in 2014, according to FINRA’s web-site. A spokesperson for Southeast Investments did not right away respond to a message looking for comment on Tuesday.