James Anthony Parrelly (CRD #728368, Registered Principal, Dearborn, Michigan) submitted an Offer of Settlement in which he was fined $5,000, suspended from association with any NASD member in any capacity for 20 days and ordered to pay a public customer the amount agreed upon pursuant to their written agreement. Without admitting or denying the allegations, Parrelly consented to the described sanctions and to the entry of findings that he recommended and effected transactions in Class B shares of mutual funds for a public customer without having reasonable grounds for believing the resultant transactions were suitable for the customer who would have benefited from owning Class A shares in the identical funds. The findings stated that Parrelly recommended the customer sell Class B shares and later recommended that she purchase additional Class B shares of the same funds so that she was subjected to contingent deferred sales charges (CDSCs) as well as a new CDSC period associated with the new purchases. The findings also stated that Parelly engaged in short-term trading of Class B shares within one year of the initial purchase, thereby subjecting the customer to a 5 percent CDSC in connection with the sale. The findings further stated that Parelly recommended that the customer use cash distributions from mutual fund positions to purchase additional shares of the same fund, generating new commissionable sales instead of reinvesting the shares with the fund group.
The suspension in any capacity was in effect from December 18, 2006, through January 6, 2007. (NASD Case #E8A2003033801)

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