Cecil Ross, Formerly of LPL Financial, Suspended by FINRA for Four Months

Ross is accused of recommending unsuitable investments in Unit Investment Trusts 

The Sonn Law Group is investigating allegations that Cecil Ross recommended unsuitable investments. If you or a family member has suffered losses investing, we want to discuss your case. Please contact us today for a free review of your case.

Cecil Ross (CRD#:2391047)  consented to findings by FINRA stating that he engaged in an unsuitable pattern of short-term trading in Unit Investment Trusts (UITs) in customers’ accounts.

The findings stated that despite the costs associated with purchasing units in new UITs, Ross recommended that most of his customers sell and roll over their positions in UITs after less than one year.

For example, a typical 24-month UIT contained three separate charges: (1) an initial sales charge [typically 1% of purchase price]; (2) a deferred sales charge [generally up to 2.5% of the offering price and deducted within three to six months of the initial offering period], and (3) a creation and development fee (“C&D fee”) [generally 0.5% of the offering price].

Thus, selling the UIT before the maturity date and the use of sales proceeds to invest in units of new UITs causes greater sales charges than if the UIT had been held until the maturity date. 

Ross recommended that 287 customers sell their UITs before their maturity dates and rollover investments into new UITs. Ross’ recommendations, which caused his customers to incur unnecessary excess sales charges, were unsuitable considering the frequency and cost of the transactions. Ross’s member firm has agreed to pay restitution to customers relating to the early sale of UITs pursuant to a settlement with the Securities and Exchange Commission.

Ross was suspended from any association with a FINRA member firm for a period of four months and fined $5,000.

Ross has been the subject of two customer disputes over the course of his career, one of which was denied. In 2014, Ross was accused of selling unsuitable investments and engaging in excessive trading. The customer was awarded $100,000 through arbitration.

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The Sonn Law Group is currently investigating allegations that brokers recommended unsuitable investments. We represent investors in claims against negligent brokers and brokerage firms. If you or your loved one experienced investment losses, we are here to help. For a free consultation, please call us now at 866-827-3202 or complete our contact form.