FINRA Bars SW Financial Stockbroker For Failure To Pay Arbitration Award

Richard James Coleman (also known as Rich Coleman and as Rick Coleman) of Melville New York a stockbroker formerly registered with SW Financial and Legend Securities has been suspended from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity on June 2, 2020 based upon allegations that he did not report to FINRA personnel as to whether he complied with his obligation to compensate a Legend Securities customer who he defrauded. Case No. 19-00102.

FINRA Public Disclosure confirms that Coleman is the subject of a customer initiated investment related arbitration claim where the customer was awarded $85,613.00 in damages based upon Coleman and Legend Securities being found jointly liable on the customer’s claims which had included that misrepresentations were made by the stockbroker and that the customer were defrauded. FINRA Arbitration No. 19-00102 (Apr. 7, 2020). According to the claim, a fiduciary duty that was owed to the customer had been breached. The Panel also determined that Coleman was liable on the customer’s claim of excessive and unsuitable trading as well as breach of contract.

This is not the first time that Coleman has been sanctioned by FINRA. He has been fined $15,000.00 and suspended for two years from associating with any FINRA member in any capacity based on the stockbroker’s consent to findings that he effected transactions on an unsuitable basis. Letter of Acceptance Waiver and Consent No. 2017052699301 (Aug. 8, 2019).

According to the AWC, between October of 2015 and February of 2017, Coleman effected trades in four customers’ accounts on a quantitatively unsuitable basis. FINRA indicated that the customers’ accounts were controlled by Coleman. The stockbroker disregarded his customers’ investment profiles, placing excessive trades which caused the customers to sustain $225,745.00 in losses while Coleman earned $139,930.00 in fees and commissions. FINRA determined that Coleman violated FINRA Rules 2010 and 2111 in this respect. The AWC also revealed that 113 of 136 trades that Coleman effected in customers’ accounts had been mismarked so he could make it seem as though he did not solicit the customers’ trades.

Coleman has been identified in eleven total customer initiated investment related disputes containing allegations of his misconduct while employed with securities broker dealers including Rockwell Global Capital and SW Financial. FINRA Public Disclosure reveals that a customer initiated investment related complaint involving Coleman’s conduct was settled for $210,000.00 in damages based upon allegations that stock trades effected in the customer’s account by Coleman were not suitable for the Rockwell Global Capital customer.

On July 23, 2019, another customer filed an investment related complaint concerning Coleman’s activities where the customer sought $20,000.00 in damages founded on accusations that unauthorized trades were executed in the customer’s account and that the customer was overcharged by Coleman when he was employed by SW Financial.

FINRA Public Disclosure also confirms that Coleman has been employed by eight different securities broker dealers who have been expelled by regulators for violation of federal securities laws or who are otherwise defunct. Coleman was employed by SW Financial between May 7, 2018 and March 14, 2019.