FINRA Sanctions NYLife Stockbroker For Bad Advice
Timothy Robert Millis of Okemos Michigan a stockbroker formerly employed by NYLife Securities LLC has been suspended for three months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that Millis poorly advised customers of NYLife Securities LLC in regard to a short-term mutual fund trading strategy as well as the purchase of a variable annuity. Letter of Acceptance Waiver and Consent No. 2017056197101 (Nov. 11, 2019).
According to the AWC, from January of 2015 to December of 2018, customers were inappropriately advised by Millis regarding mutual fund trades. The AWC stated that Millis persuaded ten customers to purchase and sell Class A mutual funds on a short term basis. FINRA determined that this was unsuitable because of the Class A mutual funds being intended for long term investing given the substantial costs incurred by investors on an up-front basis by purchasing Class A mutual fund shares.
Millis knew that Class A mutual fund shares were not designed for short-term investing. Despite this, the stockbroker advised customers to buy and sell their Class A positions after holding them for less than twelve months. According to the AWC, customers were charged $174,725.00 through up-front sales loads, causing at least five of them to sustain losses. FINRA stated that Millis’ recommendations were unsuitable as he failed to comprehend how the costs of effecting short-term trades of Class A mutual fund shares would affect his customers’ returns.
The AWC additionally stated that a customer of NYLife Securities had been provided bad advice by Millis in regard to an annuity exchange. Specifically, Millis recommended for an elderly investor, CB, to essentially liquidate a variable annuity investment and place the proceeds in Class A mutual fund shares. At the time that those recommendations had been made, CB had looming liquidity needs and expenses. The AWC stated that CB had to pay a $14,866.00 surrender charge in order to sell the annuity and paid $15,340.00 in additional charges pertaining to the Class A mutual fund shares purchased because of the stockbroker’s recommendations. FINRA determined that Millis lacked an adequate foundation to conclude that his investment recommendations for CB were suitable. He violated FINRA Rules 2010 and 2111 for this reason.
FINRA Public Disclosure additionally reveals that Millis is the subject of a customer initiated investment related written complaint which was resolved for $50,279.06 on April 4, 2019 supported by allegations of his unsuitable recommendations causing the customer to experience unwarranted charges on variable annuity and mutual fund transactions.
Millis was terminated by NYLife Securities LLC on April 1, 2019 based upon accusations that he routinely recommended or executed unsuitable mutual fund switches.