As a financial analyst and legal expert with over a decade of experience, I’ve seen my fair share of misconduct in the financial industry. The recent allegations against Gregory Corrie, a former broker with Cambridge Investment Research, are particularly concerning. According to the firm, Mr. Corrie excessively used unit investment trust (UIT) products in client accounts. This is a serious matter that could have significant consequences for investors.
Unfortunately, cases like this are not uncommon. A Bloomberg investigation found that one in every 12 financial advisors has a history of misconduct, ranging from unsuitable investment recommendations to outright fraud. These bad actors can cause significant harm to investors, underscoring the importance of thorough due diligence when selecting a financial advisor.
The seriousness of the allegations
Excessive trading in UITs can be detrimental to clients for several reasons:
- UITs typically carry high fees, which can eat into investment returns when traded excessively
- Frequent trading can result in unnecessary tax liabilities for clients
- It may indicate that the broker is prioritizing their own commissions over the best interests of their clients
As the famous investor Warren Buffett once said, “Wall Street makes its money on activity. You make your money on inactivity.” Excessive trading is rarely in the client’s best interest.
Gregory Corrie’s background
According to his FINRA BrokerCheck profile, Gregory Corrie was registered with Cambridge Investment Research from 2020 until his termination in February 2023. He has 30 years of experience in the industry and was previously registered with firms including Cetera Advisors, Invest Financial Corporation, and InterSecurities. His record shows no prior disclosures or customer complaints.
Understanding unit investment trusts
UITs are investment companies that purchase a fixed portfolio of securities and then sell units in the trust to investors. Key characteristics of UITs include:
- They are designed to provide capital appreciation and/or dividend income
- Units are sold in a one-time public offering and are not actively traded
- Investors can redeem units at the net asset value, which is sometimes subject to a deferred sales charge
Due to their unique structure and associated costs, UITs may not be suitable for all investors. FINRA Rule 2310 requires brokers to have a reasonable basis to believe a recommended transaction is suitable for the customer based on their investment profile.
Potential consequences and lessons
If the allegations against Mr. Corrie are substantiated, he could face serious consequences, including fines, suspensions, or a permanent bar from the industry. FINRA will likely investigate whether his UIT recommendations were suitable and whether he placed his own interests ahead of his clients.
This case is a reminder of the importance of working with honest, trustworthy financial professionals who prioritize their clients’ best interests. It’s also a lesson in the value of education – the more investors understand about the products they’re invested in, the better equipped they are to protect themselves from investment fraud and bad advice.
A recent study found that 6-7% of financial advisors have a history of serious misconduct. While this represents a minority, it underscores the need for thorough due diligence when choosing an advisor.
If you’re a former client of Gregory Corrie with concerns about your UITs or other investments, don’t hesitate to reach out to a qualified securities attorney. They can help you understand your rights and options for recovery.
