Charles Hyman Brown - another Registered Principal with Newbridge Securities - accepted a $5K fine and 30-day suspension as principal to settle FINRA charges he failed to reasonably supervise an RR of his member firm who churned a customer trust account and recommended investments to the elderly beneficial owner of the trust account that were inconsistent with the customer’s investment objectives, financial situation and needs. 

Brown was an assistant branch manager and, as such, was one of the individuals at the firm with supervisory responsibility over the RR's at that branch.  Brown allegedly missed numerous red flags indicating the RR's violative actions, including the following:

• the account appeared on numerous exception reports for active and aggressive trading;
• the account fluctuated in value quite substantially;
• the account experienced relatively significant declines in value in a certain year; 
• the customer was elderly; 
• there were $2,500 monthly withdrawals taken from the account;
• there were prior customer complaints against the RR.

Despite these red flags, Brown failed to take adequate supervisory action reasonably designed to prevent the representative’s churning of the trust account and recommendations of unsuitable investments to the customer.  This is FINRA Case #2008011707003.   [Disciplinary Actions for May 2011]