Regulators have imposed fines and a suspension on a former broker for allegedly exaggerating the potential performance of various stocks in emails to at least 20 clients.
The Financial Industry Regulatory Authority (FINRA) fined Richard Joseph Jackson $5,000 and suspended him for one month, citing his emails as a violation of the rule requiring client communications to be “fair and balanced.”
Jackson, who has not been registered with any brokerage firm since 2022, could not be immediately reached for comment. He settled the allegations without admitting or denying any wrongdoing.
FINRA initiated its investigation into Jackson’s communications following a review of his termination notice from his former employer, Equity Services.
A record from Jackson’s previous firm on the online database BrokerCheck notes: “Terminated due to investigation of correspondence. The investigation focused on performance data and projections, including on assets held outside the firm.”
The alleged violations occurred between January 2020 and November 2022, the period during which Jackson was employed by Equity Services. FINRA claims Jackson made “promissory, unwarranted, and exaggerated claims” about potential stock performance in emails to clients.
For example, in March 2021, FINRA states that Jackson wrote to a client, suggesting that a technology company would “likely grow in excess of 20% per year for the next 5 years” and that it would “surpass current Wall Street expectations by a significant margin.”
In another instance, Jackson allegedly emailed a client expressing his “[v]ery confident this is a $1000+ stock within 12 to 36 months.”
FINRA asserts that Jackson’s alleged conduct violated its regulation on communications with the public, Rule 2210, which prohibits “predicting or projecting performance, implying that past performance will recur, or making any exaggerated or unwarranted claims, opinions, or forecasts.” Additionally, FINRA claims that Jackson’s actions violated its general regulation on professional conduct, Rule 2010.
