Skip to Main Content
SUBMIT A TIP RECEIVE DAILY NEWS
Menu AdvisorHub
  • News
      • Latest News
          • AdvisorsRBC, Stifel Add Merrill Lifers in NY, NM
          • U.S. President Joe BidenBiden Eyeing Capital Gains Tax as High as 43.4% for Wealthy
          • SECSEC Chief Gensler Names Alex Oh to Lead Enforcement Division
          • Board MeetingBlucora Shareholders Shoot Down Activist’s Bid for Board Seats
        • Close
      • Advisor Moves
          • AdvisorsRBC, Stifel Add Merrill Lifers in NY, NM
          • (left to right) Brian Beraha, Alexis Audisio, Jared Pillar, Michelle Gonzalez, Horacio Aguirre and Vicente Del Rio moved to UBS's private wealth business in Miami from J.P. Morgan's private bank.UBS Nabs $11-Mln J.P. Morgan Private Bank Team in Florida, Another in Ohio
          • Doris Neyra, Melissa Van Putten-Henderson and Gina Jamurath moved to UBS's private wealth business in Miami from Wells Fargo's private bank.UBS Lands $14-Mln Team from Wells Private Bank in Miami
          • Merrill Lynch Exterior Sign and LogoMerrill Recruits Citi Private Banker in SF, Loses Teams to Janney, Sanctuary
        • Close
      • Enforcement
          • Advisor FraudSEC Charges RIA with Pro Athlete Niche for Ripping Off Clients
          • advisor-diy-tools-772×485Ex-Jones Broker Suspended for Attempting DIY Settlement with Client
          • Advisor GuiltyEx-Merrill Broker in Chicago Pleads Guilty to $3-Mln Fraud
          • J.P. MorganFinra Fines, Suspends Ex-J.P. Morgan Broker Fired over Unauthorized Trades
        • Close
      • Markets
        • `Nothing Safer Than Cash’: Tech Rout Puts Silicon Valley on Edge
        • ‘Any News Is Bad News’ as Earnings Fail to Save Equity Bulls
        • ‘50 Cent’ Profited From Volatility Jump, Wells Fargo Says
        • ‘Beaten Down’ ETF Is a Way to Play Inverted Curve, BofA Says
        • Close
      • Opinion
          • Temporary Restraining OrderSirianni: Toxic Culture
          • Opinion-How-Will-The-Coronavirus-Affect-The-Stock-Market-Opinion: Coronavirus – What Advisors Need to Know
          • opinion-investors-conquered-fees-next-up-is-their-own-behaviorOpinion: Investors Conquered Fees but Not Their Own Behavior
          • Investor-Confidence-In-Stocks-Rightly-Declines-Opinion-772x485Investor Confidence in Stocks Rightly Declines: Opinion
        • Close
      • Fintech News
          • Fintech Cryptocurrency ClearingFintech Firm Apex Clearing Agrees to Go Public Via SPAC
          • System outageMerrill Systems Hiccuped on Thursday as Stocks Slid
          • 7 dollar rolls‘The Rock’ Invests in Finance App Acorns, and New Users Get $7
          • TraderHigh-Frequency Traders Love Business With Robinhood
        • Close
      • From the Publisher
          • Temporary Restraining OrderSirianni: Toxic Culture
          • Welcome to AdvisorHub RIA-772×485Welcome to AdvisorHub RIA
          • 2021 PredictionsFrom the Publisher: Sirianni’s Predictions for 2021
          • Josh Rogers – 772×485Seven Questions with Tony Sirianni: Josh Rogers, Founder and CEO, Arete Wealth
          • Phil Hildebrandt — 772×485Seven Questions with Tony Sirianni: Phil Hildebrandt, Principal, CEO of Segall Bryant & Hamill
          • Christian Hyldahl, President of Varium Investment Partners-772×485An AdvisorHub Interview with Christian Hyldahl, President of Varium Investment Partners
          • John Peluso – 772×485Timely interview with John Peluso and AdvisorHub CEO Tony Sirianni
          • Louis Dworsky Coronacrash Interview-772×485Coronacrash Update: Hayden Royal’s Louis Dworsky & Tony Sirianni
        • Close
    • Close
  • Deals & Comp
  • Recruiting Wire
  • Breakaway Center
  • Resources
    • resources-home-menuResources Home
    • PRACTICE MANAGEMENT RESOURCESPractice Management Resources
    • Transition ResourcesTransition Resources
    • Fintech ResourcesFintech Resources
    • menu fintechFintech Product Directory
    • Menu-Institute-772×485Institute
    • Boutique Wealth AdvisorsBoutique
    • EventsEvents
    • Close
  • AdvisorHub TV
  • Podcasts
  • RIA Center
  • Asset Manager Hub
  • Virtual Summit
close X
April 21, 2020

Finra Sanctions Ex-Oppenheimer Broker over UIT Trades

by AdvisorHub Staff
|
Enforcement, News
|
FINRA, Morgan Stanley, Oppenheimer, Raymond James
|
Comments (3)
Share This
SUBMIT A TIP
FINRA sign
Advisorhub/Mason Braswell

A former Oppenheimer & Co. broker in Tampa, Fla., has agreed to a three-month suspension from the securities industry and a $5,000 fine over allegations that he encouraged clients to excessively trade unit investment trusts to generate commissions.

The sanctions against Brian D. Engstrom, who had a 30-year brokerage career before leaving Stifel, Nicolaus in April, extend a series of actions the Financial Industry Regulatory Authority has pressed against firms and brokers over sales of UITs, packages of fixed-income packaged products that are not designed for short-term trading.

Between July 2011 and December 2015, Engstrom recommended and helped execute early redemptions of about 1,000 UIT positions, half of which were rolled over into identical UITs of the same series, Finra said in a letter of acceptance, waiver and consent it accepted from the broker on Wednesday.

UITs meant to be held for 24 months typically carry sales charges of about 4.0% (including initial and deferred charges, and a product development fee), and premature rollovers can add an 2.95% sales charges for each switch, Finra said.

“Engstrom’s recommendations caused his customers to incur unnecessary sales charges, and were unsuitable in view of the frequency and cost of the transactions,” Finra wrote.

Oppenheimer reimbursed excess sales charges of $3.87 million to customers of Engstrom and other brokers as part of a December 2019 settlement in which it was fined $800,000 for failing to properly supervise UIT sales over five years.

Engstrom, who did not admit or deny the allegations, is not currently registered as a broker and could not be reached for comment. His Tampa-based lawyer, Peter B. King of Wiand Guerra King, did not immediately return a call for comment.

Oppenheimer “permitted” Engstrom to resign in October 2016 over allegations of unauthorized ETF trading, according to his BrokerCheck record. He commented on his regulatory record that the complaint was due to “a miscommunication,” adding that he had “resolved the matter to the client’s full satisfaction.”

Finra has brought numerous UIT sales violations against firms and brokers following a “sweep” examination focusing on rollover recommendations in 2016.

It fined Morgan Stanley $3.5 million and ordered it to reimburse customers almost $10 million to customers for failing to supervise UIT sales by hundreds of brokers from 2010 through mid-2014. Earlier this year, it censured independent broker-dealer Cambridge Investment Research and fined it $150,000 for ignoring alerts to supervisors about short-term trading in UITs.

The Securities and Exchange Commission also has focused on UITs. Raymond James Financial last year agreed to a $15 million settlement with the regulator for, among other allegation, overcharging customers more than $6 million for UIT trades. The firm in October 2018 terminated at least half a dozen brokers over short-term UIT trading allegations.

Engstrom worked for three-and-a-half years in a Pensacola office of St. Louis-based Stifel after his forced departure from Oppenheimer in October 2016. His BrokerCheck record has no disclosures about Stifel. He also worked at seven other firms, but the only other disclosure for which he was sanctioned involved the state of Florida’s charge that he was working without a license in 1996 because of a registration issue involving his then-employer, W.J. Gallagher & Co.

Like this article? Let AdvisorHub come to you!  Sign up

Share This
Comments (3)
  • on Apr 21 2020, Heisenberg says:

    And there’s that Stifel name again associated with a rogue broker. Place must be full of them or a non-compliant compliance department. Must be the Wild West there…

    > Reply to Heisenberg
    • on Apr 21 2020, Michelle says:

      Is there any reason whatsoever that an advisor would find a UIT to be in the clients best interest rather than a sector ETF? I’ve never used one and not sure if we can in my world. Just seems to be so much scrutiny with them and advisors getting dinged up due to their use or abuse.

      > Reply to Michelle
      • on Apr 23 2020, Neil Harris says:

        There can be circumstances where purchasing an outstanding UIT can be a good deal–where it sells at a discount and has a good return. The problem with this case was not the product but the sales practice..

        > Reply to Neil Harris

Leave a Reply Cancel reply

Tony Sirianni Podcast Banner

CORONACRASH NEWS

  • Stifel Bumps CEO Pay 15% to $11.5 Million

    Stifel Bumps CEO Pay 15% to $11.5 Million

    Apr 20, 2021
  • Fed to End Covid-19 Capital Break It Gave Wall Street Banks

    Fed to End Covid-19 Capital Break It Gave Wall Street Banks

    Mar 19, 2021
  • Credit Suisse Replaces U.S. Exec, Halts Bonuses as Clients Fume

    Credit Suisse Replaces U.S. Exec, Halts Bonuses as Clients Fume

    Mar 18, 2021
  • Firing of Billion-Dollar Broker Sends Warning on Work-from-Home Compliance

    Firing of Billion-Dollar Broker Sends Warning on Work-from-Home Compliance

    Mar 12, 2021
  • Big U.S. Banks’ Vows to Halt Job Cuts End as Virus Endures

    Big U.S. Banks’ Vows to Halt Job Cuts End as Virus Endures

    Feb 26, 2021

NEWS

  • RBC, Stifel Add Merrill Lifers in NY, NM

    RBC, Stifel Add Merrill Lifers in NY, NM

    Apr 22, 2021
  • Biden Eyeing Capital Gains Tax as High as 43.4% for Wealthy

    Biden Eyeing Capital Gains Tax as High as 43.4% for Wealthy

    Apr 22, 2021
  • SEC Chief Gensler Names Alex Oh to Lead Enforcement Division

    SEC Chief Gensler Names Alex Oh to Lead Enforcement Division

    Apr 22, 2021
  • Blucora Shareholders Shoot Down Activist’s Bid for Board Seats

    Blucora Shareholders Shoot Down Activist’s Bid for Board Seats

    Apr 22, 2021
  • Wells Terminates Three Brokers Over Past Insurance Sales

    Wells Terminates Three Brokers Over Past Insurance Sales

    Apr 22, 2021

Recruiting Winners: 2020 Year in Review

FINANCIAL INDUSTRY PODCASTS

AllIndependence
The must listen-to podcast for financial advisors by Tony Sirianni. Guests to include:
-Ron Kruszewski
-Shirl Penney
-Penny Pennington
-Eric Clarke
and many more
Incisive conversations focused on helping investors navigate the ever-changing global market landscape
Michael Kitces and Carl Richards discuss financial advising topics.
The “new advice value stack,” and how firms can use it to help maximize their own value propositions for their clients.
Interviews and insights for advisors curious about switching to a new broker dealer.
The Brighthouse Financial Insights Panel is a group of leading, independent experts providing powerful insights into the big challenges facing you and your clients.
Powering Independence Podcast, insights and ideas for RIAs, presented by Dynasty Financial Partners. A podcast dedicated to presenting fresh ideas and best practices for the wealth management industry.
As an industry expert, Frank LaRosa provides guidance and advice on a host of topics from recruiting and transitions, succession planning, practice management, M&A and more.
Our goal is to unlock the challenges to reveal the opportunities and what it means to provide advice in the 21st century.
Go behind the scenes with registered investment advisors and other related independent business model experts
As a nationally recognized recruiter and consultant to financial advisors, Mindy Diamond has unmatched experience in introducing advisors to the independent space.
The must listen-to podcast for investors, venture capitalists and financial advisors, with Tony Sirianni and Paul Dietrich.
An Introduction to Independence: 5 Key Episodes to Jumpstart Your Knowledgebase
Jay is an investment strategist, CERTIFIED FINANCIAL PLANNER™ and business consultant to financial advisors.
We interview top financial advisors and visionary voices to bring you the strategies, tips, and tools you need to make a difference in people’s lives.
A financial literacy and commentary show that features a number of investors, financial experts, professional athletes, business owners and more.
Join Sound Financial Group CEO Paul Adams and President Cory Shepherd every week, as they help you Design and Build a Good Life™.
The Kuderna Podcast, focusing on wealth in it's original meaning- a state of well being.
Timeless wisdom, actionable information you can use right now to make smarter investment decisions.
Made for and dedicated to those folks serious about their financial plan.
Suzanne Siracuse asks the questions nobody else asks, as influencers and interviewer collide in her new and truly unique podcast series The Big Reveal.
Our webcast is dedicated to helping our viewers get real insights by avoiding the cognitive dissonance of today’s media outlets and biased editorial filters.

Latest News 
Advisor Moves 
Enforcement 
Opinion 
  • About Us
  • Contact Us
  • Advertise
  • Events
  • Careers

 get our newsletter

Industry focused content and breaking news.

SIGN UP

Contact Us

EMAIL US
1707 Post Oak Blvd.
#484
Houston, TX 77056

© 2021 AdvisorHub
  • |Terms of Use
  • |Privacy Policy
  • |Advertise
  • |Careers
  • Facebook
  • Linkedin
  • Twitter

Back to top