A former registered rep with Huntington National Bank was suspended from the industry for 45 days and fined $10,000 for recommending municipal unit investment trusts to bank customers without understanding the risks and rewards of the products he touted.
Jeffrey Rittberger, a personal banker at a Huntington branch in Zanesville, Ohio, allegedly recommended municipal UITs totaling approximately $198,000 to five customers, according to a recent FINRA filing.
FINRA claimed that Rittberger worked with the bank's licensed brokers to help identify potential securities customers, referring those interested in buying securities products to his colleagues. Before referring them, he at times filled out an initial customer profile and completed some of the paperwork to open a securities account and purchase a particular security. He then passed the information to the brokers, assuming—wrongly it appears—that they would follow up with each of the customers to discuss their investment goals and the UITS in more detail before finalizing the sale.
FINRA chided Rittberger for not participating in follow-up meetings between the customers he referred and the brokers and for failing to take steps to ensure that those meetings occurred.
According to FINRA, Rittberger told customers that while municipal UITs were not guaranteed, they had historically earned 5% annual returns and were expected to continue to perform well.
FINRA scolded Rittberger for not doing enough to expand his limited understanding of municipal UITs, saying that his knowledge was based on brief conversations he had with the brokers. FINRA noted that he neither read the prospectuses for the UITs nor attempted to learn more about them from wholesalers.
Because he did not perform reasonable diligence to understand the products, he lacked a reasonable basis for believing the UITs were suitable for customers, thereby violating FINRA rules, the regulator said.
Rittberger's attorney, Joseph Simms of Cleveland law firm Koehler Neal, noted that his client cooperated fully in FINRA's investigation and that he ultimately decided to accept and consent to the findings of FINRA without admitting or denying them. "He appreciates the cooperation and courtesy of FINRA staff in bringing this matter to a prompt resolution and looks forward to putting it behind him and moving forward with his career," he said of his client.
Rittberger was dismissed from Huntington in April 2014, FINRA said. According to his BrokerCheck report, a customer filed a complaint against Huntington, alleging that a UIT he purchased had fallen in value and that the investment had been misrepresented. Huntington settled the claim in August 2013 for $17,670.
Maureen Brown, a spokesperson for Huntington National Bank, declined to comment on the matter.
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