Chaplin Davis Stockbroker Suspended For Suitability
Keven J. Jedlicka, of Baltimore, Maryland, a stockbroker formerly registered with Chaplin Davis, has been suspended for six months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that he traded in customer accounts on an unsuitable basis. Letter of Acceptance, Waiver and Consent, No. 2016047659701 (Jan. 2, 2018).
According to the AWC, from January 20, 2015 to January 22, 2016, Jedlicka executed an investment strategy in four of the firm’s customer accounts involving the short-term trading of unit investment trusts and class A mutual fund shares.
The AWC stated that customers incurred significant up-front sales charges on class A mutual fund purchases that were executed based on Jedlicka’s recommendations. The class A mutual fund shares were evidently designed for long-term investing. In addition, most of the unit investment trusts recommended by Jedlicka contained two-year maturities, and carried sales charges as high as four percent. Evidently, the unit investment trusts and mutual funds that Jedlicka recommended were only held by customers for one-hundred and six days on average.
The AWC also revealed that in some circumstances, Jedlicka would make recommendations for customers to sell their class A mutual fund share positions and use the proceeds to buy other class A mutual fund shares containing the same or very similar composition and objectives as the securities that were previously sold. Customers sustained losses of about $206,306.00 as a result of following Jedlicka’s investment recommendations.
The AWC stated that customers paid sales charges that were not necessary, and the cost and frequency of trades evidenced that Jedlicka’s investment recommendations were not suitable for customers. Consequently, FINRA found that Jedlicka’s conduct was violative of FINRA Rules 2010 and 2111.
Chaplin Davis fired Jedlicka on January 22, 2016, based upon accusations that she effected trades excessively and without regard to suitability. FINRA Public Disclosure reveals that Jedlicka has also been fired from her previous employer, Wells Fargo Advisors, based upon allegations of her misconduct relating to a faulty variable annuity transaction. Between February 6, 2016 and September 7, 2017, she was associated with Capital Portfolio Management, Inc.
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