In the securities arbitration complaint, our clients our clients allege they “received unsuitable investment advice and securities recommendations” from Flynn, who was our client’s financial advisor. Breach of fiduciary duty, negligence, and breach of contract are also claimed. Continue reading
Suitability for Retail Customers
FINRA rule 2111 ensures that firms and people associated with firms deal with customers fairly. The rule is composed of three main parts: reasonable basis suitability, customer-specific suitability, and quantitative suitability. FINRA will observe unsuitable recommendations to retail investors and also deficiencies in some firms; supervisory systems.
In the past, FINRA has observed situations where customers’ financial needs were not considered. Registered representatives failed to think about cumulative fees, sales charges, and commissions. Failure to understand the specific features and terms of products recommended to customers was a common contributor to the problems that FINRA observed. Continue reading
It seems like a way to get justice against fraud: requesting an arbitration hearing with FINRA after losing money in a fraudulent or shady investment your broker insisted was solid. A defrauded investor then files a complaint with FINRA, who arranges an arbitration hearing, and money damages are awarded to the investor, paid by the broker and/or the broker dealer.
Sounds fair, right?
While many investors have been able to recover at least some of their losses, about 25% of these judgments go unpaid. FINRA arbitration panels awarded $84 million to investors in 2017 alone. Of that sum, $21 million of it remains unpaid. So what good is arbitration if you’re still waiting to receive your award from a “deadbeat?” Most of these awards are against small brokerage firms which are out of business and did not carry insurance. Continue reading
Dan Brown (CRD#: 3184347) is a previously registered broker whose last employer was Joseph Stone Capital L.L.C. (CRD#:159744) of Center Moriches, NY. His previous employers include First Standard Financial Company LLC (CRD#:168340), Legend Securities, Inc. (CRD#:44952, expelled by FINRA on 4/17/2017) and Tryco Securities, Inc. (CRD#:104025), all of Miller Place, NY. Three of his former employers have been expelled by FINRA. He has been in the business since 1999. Continue reading
Investors who have gone through FINRA arbitration claims against closed boiler-rooms know that collecting an award can be a problem. Brokers and broker-dealers who have actions filed against them are also required to pay fees, as well as any financial restitution they are ordered to pay.
While most of these arbitration actions result in some form of restitution for the defrauded investor, FINRA reports that about 2% of these cases are never paid. Now FINRA has a single page on its website where you can look up companies and brokers who have left their obligations unpaid. The information is available through BrokerCheck on an individual basis, but this is the first time it has been available collectively. Continue reading
Richard Lynn Pittman (CRD#: 2845145) is a registered broker and investment advisor currently employed with Cetera Advisors LLC (CRD#: 10299) of Memphis, TN. His previous employers include Investors Capital Corp. (CRD#:30613), also of Memphis, Washington Square Securities, Inc. (CRD#:2882) of Des Moines, IA, and WMA Securities, Inc. (CRD#:32625) of Duluth, GA. He has been in the industry since 1997.
Richard Pittman has three disclosures, all recent customer disputes. The most recent dispute, filed on 10/31/2018, alleges that Pittman made unsuitable recommendations on investments that were purchased in 2008. Damages requested total $300,000. Pittman denies the allegations, and the case is currently pending. Continue reading
It’s one thing when a company terminates your employment. It’s another thing when the company causes you to lose business.
John L. Perry and Robin Johnson are two former financial advisors for Wells Fargo that have brought a complaint against the company. After news broke of Wells Fargo’s extensive misconduct, their partnership with Wells Fargo lost half its business, and suffered significant damage. (A timeline of Wells Fargo’s actions since 2016 is available here, including over 3.5 million fake accounts and extensive over-charging of clients.) Continue reading
Recently we told you about broker Thomas Kelly, (CRD#: 2877415) of National Securities Corp. of New York, NY. He has worked in the financial industry since 1997, and now has a total of 19 disclosures dating back to 1999, primarily customer disputes and FINRA arbitration claims.
In addition to the earlier disclosures that have a total requested damages amount of $1,191,844, another customer filed a dispute on 11/1/2018, alleging “suitability, unauthorized trading, breach of fiduciary duty and negligence.” This new claim is currently listed as “pending,” bringing the total of pending claims to four. The customer requests damages of $500,000, bringing the total of requested damages in these claims to $1,691,844. Continue reading
Silver Law Group has filed the first arbitration claim against SagePoint Financial related to GPB Capital investments. The claim, filed on behalf of a client who invested in GPB’s automotive fund, is for $400,000.
GPB is under investigation by federal and state agencies, and is accused of being a Ponzi scheme. In December 2018 they stopped paying investors, the value of their private placement investments has gone down, and the future of the company is uncertain. Continue reading
UBS has marketed a so-called “Yield Enhancement Strategy” (YES) to certain of its clients as a safe way to increase the return on their money. Unfortunately, though marketed as low-risk, their Yield Enhancement Strategy was quite risky and ended up causing some investors to lose money. What was supposed to increase wealth ended up destroying it.
Investors may have been steered into this strategy without understanding the risks involved, and could be eligible to recover some of their losses through FINRA arbitration. Continue reading