Former Berthel Fisher rep suspended for 21 months

Jeffrey Dragon also fined $50,000 over unsuitable recommendations.

The Financial Industry Regulatory Authority Inc. has suspended former Berthel Fisher & Co. broker Jeffrey Dragon for 21 months and fined him $50,000 for unsuitable unit investment trust recommendations he made to clients.

Mr. Dragon was fired by Berthel Fisher in 2016.

Finra said that in 2013 and 2014, Mr. Dragon recommended to 12 customers — many of them seniors, unsophisticated investors, or both — that they liquidate positions in unit investment trusts that they had owned for only a few months and which they had purchased on his recommendation. Mr. Dragon then recommended that they use the proceeds to purchase other UITs.

Because each of those purchases carried a new sales load, and because UITs are not designed to be actively traded, Finra said that Mr. Dragon’s recommendations were excessive and unsuitable. The regulator also said that Berthel Fisher not only allowed this activity to occur but profited from it as a direct result of its inadequate system for supervising UIT trading.