In its first disciplinary move related to Regulation Best Interest, the Financial Industry Regulatory Authority has fined a former registered rep $5,000 and issued a six-month suspension.
From July 2020 through November 2021, Charles V. Malico willfully violated Reg BI's Care Obligation and also violated FINRA Rule 2010 "by recommending a series of transactions in the account of one retail customer that was excessive in light of the customer's investment profile and therefore was not in that customer's best interest," FINRA's order explained.
A FINRA spokesperson confirmed Wednesday that this action represents the regulator's first Reg BI-related fine. FINRA's action followed an enforcement review of an arbitration claim.
At the time, Malico worked for Network 1 Financial Securities in Huntington Station, New York, according to BrokerCheck. His client was a 63-year-old tax preparer with an annual income of roughly $100,000 and a liquid net worth of about $50,000.
Although the client's average account balance during the relevant period was less than $30,000, "Malico recommended that he make more than 350 trades in his account," which meant the individual paid more than $54,000 in commissions and other trading costs, FINRA said.
