Bob D’Andria (CRD#: 1916172), a registered representative with International Assets Advisory, LLC (CRD#: 10645) in Spring Lake, New Jersey, has been suspended from the securities industry after recommending non-traditional exchange traded products (NT-ETPs) without having a sufficient understanding of these investment products, according to his BrokerCheck record accessed on January 24, 2020.
On January 2, 2020, Bob D’Andria entered into an Acceptance, Waiver, and Consent (AWC) with FINRA, the Financial Industry Regulatory Authority, consenting to FINRA’s findings that he recommended non-traditional exchange traded products without having sufficient knowledge of the investments, leading to losses to investors. He also consented to a two-month suspension from the securities industry, from February 3, 2020 to April 2, 2020. He also paid a $5,000 fine. A copy of the AWC can be viewed here.
What happened in this case? Bob D’Andria failed to understand that, when investors hold non-traditional exchange-traded products for more than a day, the funds do not track a given index (i.e. the S&P 500), as would be expected when the funds are held for a day or less. When held for long periods, the investments generally lose money. As Guedji, Li, and McCann write in their article “Leveraged ETFs, Holding Periods and Investment Shortfalls,” investors in non-traditional exchange traded products (also known as leveraged or inverse ETFs) “can lose 3% of their investments in less than 3 weeks, an annualized cost of 50%.”
Bob D’Andria recommended these products but lacked the reasonable basis to do so. As a result, his clients lost money. Because he did not do a reasonable basis suitability analysis, he did not fully understand how the product worked, and thus failed to grasp the features and risks of these non-traditional exchange-traded products. Instead of holding these products for a day or less, Bob D’Andria’s clients held these positions for periods ranging from 30 to 758 days, for an average holding period of 327—far longer than is reasonable or suitable. As a result, FINRA alleges that Bob D’Andria’s clients lost around $93,000.
This regulatory action by FINRA is not the only disclosure on Bob D’Andria’s BrokerCheck record. On April 29, 2003, the National Association of Securities Dealers (NASD), the precursor to FINRA, suspended Bob D’Andria from June 2, 2003 to June 11, 2003. He entered into an Acceptance, Waiver, and Consent (AWC) in which he consented to the findings that he failed to disclose facts on his Form U4, the Uniform Application for Securities Industry Registration or Transfer (which all registered representatives must fill out upon commencing work with a new firm). NASD also fined Bob D’Andria $10,000.
On January 27, 2001, Merrill Lynch terminated Bob D’Andria. The firm found that he initialed a form on a customer’s behalf, transferring funds from the client’s single account to the client’s joint account for a real estate closing.
On August 8, 2000, a customer filed a complaint against Bob D’Andria, alleging that he misrepresented a mutual fund investment, made purchases in their account without authorization, and used margin without authorization. The customer originally sought $90,000 in damages; the matter was settled for $30,000.
Over his 26-year career in the securities industry, Bob D’Andria has worked for seven broker-dealers. In addition to International Assets Advisory, LLC (CRD#: 10645), he has also worked for the following brokerage firms:
- Westminster Financial Securities, Inc. (CRD#: 20677)
- Gunnallen Financial, Inc. (CRD#: 17609)
- John Hancock Funds, Inc. (CRD#: 28262)
- Merrill Lynch, Pierce, Fenner & Smith Incorporated (CRD#: 7691)
- Painewebber Incorporated (CRD#: 8174)
- The Stuart-James Company, Incorporated (CRD#: 11691)
If Bob D’Andria was your broker and you have questions about your investments, don’t hesitate to contact the securities attorneys of Fitapelli Kurta. Call (877) 238-4175 or email email@example.com for your free case consultation.