FINRA Bars NEXT Financial Stockbroker In Investigation
Charles Lawrence Doraine of Corpus Christi Texas a stockbroker formerly registered with NEXT Financial Group Inc. has been barred from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon findings that Doraine neglected to cooperate with the regulator during the course of an investigation into his allegedly unsuitable investment advice. Letter of Acceptance Waiver and Consent No. 2018059323201 (Apr. 27, 2020).
According to the AWC, Doraine was the subject of a FINRA investigation concerning allegations of him providing bad investment advice to customers. The regulator was examining whether Doraine allegedly urged customers to trade mutual fund A shares and Puerto Rican municipal bonds on a short term basis. FINRA was also reviewing if Doraine had caused customers’ accounts to be overconcentrated in municipal bonds.
On April 22, 2020, a request was made by FINRA for Doraine to provide recorded testimony in response to the allegations that were made against him. He was expected to cooperate with Rule 8210 by testifying on May 5, 2020. On April 22, 2020, Doraine’s legal counsel notified FINRA Department of Enforcement that Doraine understood the regulator’s request for his testimony but refused to cooperate with it. Doraine was found by FINRA to be in violation of FINRA Rules 2010 and 8210.
This is not the first time that Doraine has been sanctioned by FINRA for misconduct in the securities industry. He has been fined $5,000.00 and suspended from associating with any FINRA member in any capacity based upon consenting to findings that he engaged in unauthorized trading in violation of National Association of Securities Dealers (NASD) Rules 2110 and 2510(b). Letter of Acceptance Waiver and Consent No. 2005002388201.
FINRA Public Disclosure reveals that Doraine has been identified in seven customer initiated investment related disputes containing allegations of his misconduct while employed with NEXT Financial Group Inc. and Merrill Lynch. Doraine is the subject of a customer initiated investment related arbitration claim which settled for $350,000.00 in damages based upon allegations that mutual fund trades were not suitable for the Merrill Lynch customer and that the customer’s account was churned.
Another customer initiated investment related arbitration claim involving Doraine’s conduct was settled for $400,000.00 in damages based upon allegations that misrepresentations had been made to the customer and that trades were effected in the customer’s account on an excessive and unauthorized basis by Doraine during the time that the stockbroker was associated with Merrill Lynch. On December 19, 2018, a customer initiated investment related arbitration claim involving Doraine’s conduct was settled for $375,000.00 in damages based upon allegations of suitability. FINRA Arbitration No. 18-01554. According to the claim, the NEXT Financial Group customer’s account had been exposed to short-term mutual fund trades between October of 2012 and 2017 which failed to be appropriate given the customer’s tolerance for risk.
Doraine is the subject of another customer initiated investment related arbitration claim in which the customer requested $500,000.00 in damages based upon allegations that improper mutual fund switches had been made by Doraine between 2012 and 2018. FINRA Arbitration No. 19-02841 (Sept. 19, 2019). According to the claim, the customer was sold variable annuities that were not appropriate or suitable. The claim also alleges that Doraine exploited the customer’s diminished capacity to effect transactions.
On February 10, 2020, a customer initiated investment related arbitration claim involving Doraine’s conduct was settled for $3,050,000.00 in damages based upon allegations of Doraine’s excessive trading of mutual funds and bonds for the customer’s account and the stockbroker’s overconcentration of the customer’s account in bonds. FINRA Arbitration No. 18-03088.
Doraine’s registration with NEXT Financial Group has been terminated as of September 30, 2019.