Finra fines H&R Block broker for unsuitable reverse convertible sales

By Angela McDaniels

Tacoma, Wash., Feb. 16 - The Financial Industry Regulatory Authority fined and suspended Andrew MacGill for making unsuitable sales of reverse convertibles to a retired couple, according to a Finra news release.

MacGill is a broker at H&R Block Financial Advisors, Inc. (now known as Ameriprise Advisor Services, Inc.). The firm was ordered to pay $75,000 in restitution to the couple for losses they incurred.

Finra said the retired couple receiving restitution had, on MacGill's recommendation, invested nearly 40% of their total liquid net worth in nine reverse convertibles, exposing them to a risk of loss that was "inconsistent with their investment objectives and risk tolerance" and which ultimately resulted in substantial loss.

The authority suspended MacGill from associating with any Finra-regulated firm in any capacity for a period of 15 days, fined him $10,000 and ordered him to disgorge $2,023 in commissions that he earned from his sales of reverse convertibles to the couple.

In concluding this settlement, H&R Block and MacGill neither admitted nor denied the charges, but they consented to the entry of Finra's findings, according to the release.

The authority also fined H&R Block $200,000 for failing to establish adequate supervisory systems and procedures for supervising sales of reverse convertibles to retail customers.

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