former registered representative of Dean Witter Reynolds
(now part of Morgan Stanley Dean Witter) has settled charges that she engaged in violative mutual fund switching, said the The Securities and Exchange Commission
Leslie E. Rossello
agreed to pay a fine of $10,000 to settle the allegations, while neither admitting nor denying any wrongdoing. She also agreed to be suspended from association with any broker-dealer for a period of twelve months
The SEC had claimed that between March of 1994 and November of 1996 Rossello had on forty-eight different occasions, switched customer assets between funds for her benefit rather than that of her customers.
The extra commissions generated by the "churn" amounted to approximately $157,000, said the Commission in a statement. It also claimed that Rossello "misrepresented and omitted to inform those customers of material facts, including, but not limited to the payment of contingent deferred sales charges and the amount of those sales charges, and the option of exchanging their fund shares for another mutual fund in the same family of funds at little or no cost."
It further contended that she "failed to disclose the unsuitable nature of the frequency of these switches to her customers notwithstanding that she knew that mutual funds are generally long-term investments and not suitable for short-term trading."
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