Mercer Times

Attorney General Matthew J. Platkin and the Division of Consumer Affairs announced that the Bureau of Securities has revoked the registrations of a New Jersey broker-dealer agent/investment adviser representative for recommending unsuitable, high-risk investments to elderly clients. These actions were not in their best interest, benefitted him financially, and resulted in financial losses for them.

Carlos Leston, also known as Jose Carlos Leston or Jose C. Leston, from Maywood, New Jersey, sold $3.65 million in securities to two elderly clients without disclosing his referral arrangement with the lending company or that its CEO was a friend barred from the securities industry. Leston received over $1.5 million in compensation from this company.

On Leston’s advice, the elderly clients liquidated existing insurance annuities they relied on for steady incomes to purchase these investments. This led to losses, taxes, and surrender charges that outweighed any potential benefits.

“Protecting New Jersey investors from financial exploitation is a responsibility my office takes very seriously,” said Attorney General Platkin. “The action announced today makes it clear that we have no tolerance for unscrupulous agents who unlawfully enrich themselves at the expense of the elderly clients who trust them with a lifetime of savings.”

Leston conducted these transactions while registered with a Massachusetts-based broker-dealer but violated numerous policies requiring compliance with Regulation Best Interest—a federal rule mandating brokers act in their customers' best interests.

“Instead of putting the financial interests of his clients ahead of his own, as he was required to do,” said Cari Fais, Acting Director of the Division of Consumer Affairs. “We will continue to vigorously enforce our laws and regulations to protect investors from egregious financial abuse.”

The Bureau found that Leston engaged in dishonest practices by violating rules such as failing to comply with Regulation Best Interest and recommending costly annuity contract surrenders. He also breached his employer's policies by engaging in unauthorized business activities and establishing prohibited relationships with clients.

Additionally, it was found that Leston engaged in unethical practices within the insurance business by advising clients to surrender annuity contracts resulting in excessive costs.

“Investors expect – and the law requires – that financial professionals conduct business in compliance with policies promoting transparency,” said Elizabeth M. Harris, Chief of the Bureau of Securities. “When professionals violate Regulation Best Interest and other important investor protections, we will hold them accountable.”

The Bureau’s action was handled by Deputy Bureau Chief Amy Kopleton along with Supervising Investigators Rachel Glasgow and Irwin Slotnick and Investigator Gillian Spellman.