David Manor of Boston Massachusetts a stockbroker formerly registered with Wells Fargo Clearing Services LLC has been charged by Financial Industry Regulatory Authority (FINRA) Department of Enforcement in a Complaint supported by accusations that (1) Manor engaged in unapproved outside business activities and private securities transactions involving a customer of the firm and (2) Manor executed unsuitable trades in the customer’s account held at an outside Charles Schwab account. Department of Enforcement v. David Manor Disciplinary Proceeding No. 2017056648801 (Apr. 16, 2019).

According to the Complaint, from February of 2017 and November of 2017, during the time that Manor had been associated with Wells Fargo Clearing Services, a seventy-five year old customer had arranged for Manor to facilitate the sale of the customers mineral rights. Allegedly, a total of $107,000.00 had been paid to Manor (indirectly through Manor’s spouse) as compensation for, inter alia, valuing the mineral rights, arranging the mineral rights sale, corresponding with prospective purchasers; and negotiating with prospective purchasers on behalf of the customer.

The Complaint stated that throughout this period, Manor failed to procure approval from the firm’s supervisory personnel for his involvement with the customer’s mineral rights transactions, and Manor utilized unauthorized communication devices when working with the customer on the transaction. Supposedly, this $300,000.00 mineral rights sale was never made known to the firm by Manor; conduct FINRA alleged to be violative of FINRA Rules 2010 and 3270.

The Complaint also stated that when Manor’s mineral rights were sold in March of 2017, part of the customer’s funds were deposited into the customer’s account at Wells Fargo. FINRA alleged that the customer expressed an interest at this time in making additional contributions into the customer’s existing variable annuities. However, Manor instead steered the customer towards establishing a brokerage account at Charles Schwab so that Manor could invest the funds on Manor’s behalf.

Apparently, the customer followed Manor’s directions, and Manor completed the paperwork to establish the account. In so doing, Manor allegedly made false statements on the customer’s account application to make it appear as though the customer was wealthier, and that the customer was funding the account through savings and wages. The Complaint further alleged that Manor falsified the customer’s experience with options trading, claiming that the customer had twenty-years of options trading experience and possessed good knowledge of the products.

FINRA Department of Enforcement alleged that the customer had no experience with options because the customer had not traded the products before. Indeed, FINRA claims that the foundation of Manor recommending for the customer to place the accounts at Charles Schwab was that the customer would not have otherwise been permitted to trade options at Wells Fargo. The Complaint stated that Manor ultimately transferred $250,000.00 from the customer’s Wells Fargo account to the Charles Schwab Account.

Once the funds were deposited into the Charles Schwab account, Manor reportedly effected ninety-four put options on the S&P 500 Index. The Complaint alleged that those transactions were placed in the customer’s account without Manor ever contacting the customer beforehand.

Apparently, the value of the S&P 500 surpassed the strike prices, and the put options ultimately expired. Consequently, all the customers’ funds spent on the options allegedly vanished, causing the customer to sustain $224,837.00 in losses.

FINRA claimed Manor’s trading was unsuitable given the customer’s lack of options experience and the fact that between twenty-five and fifty percent of the customer’s net worth had been placed in the products. Consequently, FINRA Department of Enforcement alleged Manor’s conduct was violative of FINRA Rules 2010, 2360(b)(19) and 2111.

FINRA Public Disclosure reveals that Manor has been identified in two customer initiated investment related disputes containing allegations of his violative conduct while employed with Santander Securities and Wells Fargo. Specifically, on May 24, 2017, a customer initiated investment related complaint involving Manor’s conduct was settled for $30,000.00 in damages founded on accusations that while Manor was associated with Santander Securities LLC, misrepresentations had been made to the customer concerning the customer’s investments; and the customer was placed into an unsuitable annuity product.

Then, a customer initiated investment related arbitration claim involving Manor’s activities was resolved for $95,000.00 in damages based upon allegations that while Manor was associated with Wells Fargo, Manor poorly advised the customer concerning the customer’s investments, causing the customer to incur unwarranted investment losses. FINRA Arbitration No. 17-03210 (Sept. 7, 2018).

Manor was terminated by Wells Fargo Clearing Services LLC on January 9, 2018 supported by accusations that Manor steered a customer towards effecting securities transactions away from the firm.

The information contained herein has been obtained from reliable sources however may not be accurate and is not guaranteed by us. Readers are encouraged to undertake their own independent investigation and evaluation of the relevant facts. All claims and allegations are subject to adjudication, decisions may be subject to appeal, and no inference is intended, nor should any inference be made from any information contained herein from any source.

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Guiliano Law Group, P.C.

Our practice is limited to the representation of investors. Over the last three decades, we have recovered more than a hundred million dollars for more than 1,000 injured investors from all over the United States and several foreign countries. We accept representation purely on a contingent fee basis, meaning there is no cost to you unless we make a recovery for you. There is never any charge for a confidential consultation or an evaluation of your claim. For more information, contact us at (877) SEC-ATTY.

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