According to FINRA, Emilio Guajardo Jr. was assessed a deferred fine of $5,000, suspended from association with any FINRA member firm in all capacities for three months, and ordered to pay deferred disgorgement of $34,878.29 plus interest for overconcentrating customer accounts in a single-sector Unit Investment Trust (UIT).

Guajardo recommended that customers invest in a UIT that invested only in the energy sector, despite these recommendations being inconsistent with the customers' investment objectives and risk tolerances. His recommendations resulted in concentrations ranging from 22 percent to 99 percent of customers' account assets in this single alternative investment.

Guajardo obtained commissions totaling $34,878.29 from these recommendations. His member firm entered into settlements with the affected customers.

Concentration risk occurs when a portfolio is overly weighted in a single sector, security, or asset class. When a single investment represents a large percentage of a customer's portfolio, the customer faces increased risk if that investment declines in value.

Unit Investment Trusts that focus on a single sector like energy can experience significant volatility based on sector-specific factors. Recommending high concentrations in such products to customers without appropriate risk tolerances violates the broker's duty to make suitable recommendations.

The suspension is in effect from January 6, 2025, through April 5, 2025. Investors should review their portfolios for excessive concentration and discuss diversification with their financial advisors.