NEGLIGENCE, BREACH OF FIDUCIARY DUTY, AND NEGLIGENT SUPERVISION

$400,000.00

FINRA

Respondent McBride failed to respond to FINRA request for information.

Letter

Bar (Permanent)

All capacities

Indefinite

11/7/2023

Pursuant to FINRA Rule 9552(h) and in accordance with FINRA's Notice of Suspension and Suspension from Association letters dated August 4, 2023 and August 28, 2023, respectively, on November 7, 2023, McBride is barred from association with any FINRA member in all capacities. McBride failed to request termination of his suspension within three months of the date of the Notice of Suspension; therefore, he is automatically barred from association with any FINRA member in all capacities.

NEWBRIDGE SECURITIES CORPORATION

Discharged

After internal review, it was disclosed that Mr. McBride failed to follow internal policies and procedures. Representative violated the know your customer requirement by communicating with and executing requests with someone other than client or authorized agent.

CLAIMANTS ALLEGE THEY SUFFERED SUBSTANTIAL ECONOMIC DAMAGE AS A RESULT OF THE UNAUTHORIZED AND UNSUITABLE TRANSACTIONS PLACED BY RESPONDENT, INCLUDING TRANSACTIONS IN EXCHANGE TRADED PRODUCTS LIKE VXX.

$200,000.00

$82,000.00

AFSI settled this matter in order to avoid the costs associated with arbitration.

FINRA

Without admitting or denying the findings, McBride consented to the sanctions and to the entry of findings that he settled a customer complaint without notifying his member firm. The findings stated that over the course of four days in July 2013, McBride executed $320,000 in securities purchases on the customer's behalf. The customer had instructed the purchases to be spread across his and his wife's six accounts. Due to a mistake in execution, all of the securities were purchased in only one of the accounts, which did not have a sufficient balance to cover the purchases. The customer incurred a margin balance and was charged margin interest. The customer noticed the margin balance and interest and demanded of McBride that the firm reimburse him the interest. Rather than reporting the complaint to the firm, McBride wrote four checks to the customer from his personal account, totaling $12,845.86, to reimburse the customer for the margin interest charges he complained about. McBride did not disclose the customer's complaint or the payments he made to the customer to the firm until after the customer complained directly to the firm. The findings also stated that McBride sent 14 emails to the customer listing account balances that were overstated from approximately $200,000, to as high as $570,000 more than the actual value of the accounts, which averaged around $3.9 million. The customer requested that McBride send summaries of his account values to supplement the account statements he received monthly from McBride's firm. McBride agreed, and provided account summaries via email that identified the account value for each account and the aggregate value for all six accounts, as of the date of the email. To do so, McBride created an excel spreadsheet that was supposed to reflect all activity in the accounts. McBride or his assistant maintained the spreadsheet themselves, inputting transactions as they occurred. At some point, the account values reflected on the spreadsheet became inflated due to inadvertent errors made by McBride or his assistant, including a failure to remove some positions after they were sold and a failure to account for certain reverse stock splits. In addition, McBride did not account for the margin balance and interest charges discussed above. McBride did not detect the inflated values in the spreadsheet. The findings also included that in connection with non-traditional exchange-traded funds, which were prohibited by his firm, McBride mismarked order tickets as unsolicited when the transactions were in fact solicited.

Acceptance, Waiver & Consent(AWC)

Civil and Administrative Penalty(ies)/Fine(s)

$12,500.00

Suspension

All Capacities

40 days

11/6/2017

12/15/2017

CLAIMANT ALLEGES THAT, FROM OCTOBER 2011 TO DECEMBER 2014, HE WAS RECOMMENDED AND SOLD UNSUITABLE INVERSE-LEVERAGED ETFS AS WELL AS PRECIOUS METALS AND MINING/NATURAL RESOURCES ETFS AND COMMON STOCKS. AS A RESULT, HE CLAIMS HE SUFFERED COMPENSATORY DAMAGES OF $2,107,607.

$2,107,607.00

$100,000.00

CLAIMANT ALLEGES THAT THE ENTIRE MANAGEMENT AND SUPERVISION OF HIS ACCOUNT ARE AT ISSUE IN HIS CLAIM, INCLUDING THE PRODUCTS (UNSPECIFIED IN THE STATEMENT OF CLAIM) RECOMMENDED AND SOLD BY RESPONDENTS. CLAIMANT REQUEST AN AWARD OF $917,600 IN OUT OF POCKET LOSSES, INTEREST, COSTS, ATTORNEY FEES, AND UNSPECIFIED PUNITIVE DAMAGES.

$917,600.00

$290,000.00

Respondents choose to settle this matter for $290,000, with AFSI paying $245,000 and McBride paying $0.00

THE CLAIMANT ALLEGES FROM SEPTEMBER 2009 ON THEY WERE INVESTED IN ETFS AND ETNS THAT WERE PROHIBITED UNDER FIRM POLICY, UNSUITABLE, NOT DIVERSIFIED AND OVERLY CONCENTRATED.

$4,837,174.00

AMERIPRISE FINANCIAL SERVICES, INC.

Discharged

REGISTERED REPRESENTATIVE WAS DISCHARGED FOR VIOLATION OF COMPANY POLICY RELATED TO SETTLEMENT IN THE FIELD AND SOLICITATION OF PROHIBITED SECURITIES.

CUSTOMERS ALLEGE UNAUTHORIZED PURCHASE OF AMERICA ONLINE, INC. ON 10/06/2000.

$46,100.00

THE FIRM REVIEWED THE ALLEGATIONS, DETERMINED THEM TO BE WITHOUT MERIT AND DENIED THE CLAIM. THE TRANSACTIONS AT ISSUE OCCURRED ALMOST 3 YEARS BEFORE CONTACTING THE FIRM. CUSTOMER RECEIVED TRADE CONFIRMATIONS AND MONTHLY ACCOUNT STATEMENTS CLEARLY INDICATING THE TRANSACTIONS AND POSITIONS HELD.

FAILURE TO FOLLOW INSTRUCTIONS REGARDING PURCHASE OF UPS AND SALE OF DISNEY STOCK ON NOVEMBER 10, 1999. CUSTOMER ALLEGES GIVING INSTRUCTIONS TO ENTER LIMIT ORDER TO BUY UPS AT 55 AND TO SELL DISNEY IF UPS ORDER IS FILLED. A MARKET SELL ORDER FOR DISNEY ENTERED. DISNEY SOLD BUT UPS NEVER FILLED. CUSTOMER SEEKING REPURCHASE OF 450 DISNEY SHARES.

$5,000.00

I VEHEMENTLY DENY CUSTOMER'S STATEMENT THAT I WOULD ONLY SELL HER DISNEY STOCK IF HER BUY ORDER FOR UPS WAS FILLED. OLDE DISCOUNT CORPORATION PROHIBITS ITS REPRESENTATIVES FROM HAVING OR EXERCISING DISCRETIONARY AUTHORITY OVER A CUSTOMER'S ACCOUNT AND ORDERS MUST BE CONFIRMED WITH THE CUSTOMER PRIOR TO ENTRY. ON SEVERAL OCCASIONS CUSTOMER STATED THAT SHE WANTED TO SELL HER DISNEY STOCK AND USE THE PROCEEDS TO PURCHASE UPS. I CALCULATED THE APPROXIMATE NUMBER OF UPS SHARES SHE COULD PURCHASE AT $55.00 PER SHARE WITH THE PROCEEDS FROM THE DISNEY SALE. CUSTOMER WAS AWARE THAT 2 ORDERS WERE BEING PLACED. I VERBALLY READ BACK TO CUSTOMER THE DISNEY SELL ORDER AN THE ORDER TO BUY UPS AT $55.00. CUSTOMER CONFIRMED BOTH ORDERS. THE FIRM REVIEWED THE MATTER AND DETERMINED THAT CUSTOMER PLACED SIMULTANEOUS ORDERS TO SELL DISNEY AND LIMIT BUY ORDER FOR UPS WHICH WERE READ BACK TO HER BEFORE ENTRY. THE SELL ORDER EXECUTED AND THE BUY DID NOT. THE CLIENT'S INSTRUCTIONS WERE FOLLOWED. THE FIRM DID NOT OFFER SETTLEMENT OR COMPENSATION.