Ladenburg Thalmann & Co. Inc. (“Ladenburg Thalmann”) (CRD# 505) has many different complaints filed by FINRA (Financial Industry Regulatory Authority), state regulatory organizations, and investors such as yourself. At the Law Offices of Robert Wayne Pearce, we have investigated Ladenburg Thalmann, its regulatory and customer complaints, and have also represented investors with claims of fraud, negligence, and breach of fiduciary duty against this organization and its financial advisors.
If you believe you have a claim against Ladenburg Thalmann, you should strongly consider hiring an investment loss lawyer. You should not wait until it’s too late to file a claim. The Law Offices of Robert Wayne Pearce, P.A., offers free consultations. Give us a call at 800-732-2889. Let’s discuss your case and see what we can do to help you get the compensation you need and deserve.
Can I Sue Ladenburg Thalmann & Co. Inc.?
If you’ve lost money caused by Ladenburg Thalmann and/or its employees’ misconduct then the answer is, YES, you can sue Ladenburg Thalmann but the odds are you signed away your right to sue in court and agreed to resolve your dispute in a FINRA arbitration proceeding. Attorney Robert Wayne Pearce has over 40 years of personal experience in FINRA arbitration proceedings and knows very well how you can not only sue Ladenburg Thalmann in FINRA arbitration proceedings, but WIN that arbitration. The easiest way to know if you have a viable case against Ladenburg Thalmann is to call Attorney Pearce at our office at 800-732-2889.
What is Ladenburg Thalmann & Co. Inc.?
Ladenburg Thalmann (CRD# 505) in the late 1800s as an investment bank and member of the New York Stock Exchange. Its broker-dealer operations membership with FINRA began in 1936. Since then there have been several changes and restructuring of the company. Ladenburg Thalmann is now controlled by Advisor Group Holdings, LLC and headquartered in New York, New York. Its independent broker-dealer Business Model has grown substantially since 2006 through acquisition and organic development of primarily one and two person registered representative offices supervised remotely. Today there are over 4400 Ladenburg Thalmann registered representatives in every state. It is now part of a network that has become 1 of the largest broker-dealer and investment advisory firms in the United States with over 11,500 affiliated registered representatives and investment advisors.
Ladenburg Thalmann & Co. Inc. Has Many Different Regulatory Problems
Ladenburg Thalmann’s recent growth spurt has not been without consequences. There have been approximately 36 Federal, state and self-regulatory body disclosure events; that is, final and formal proceedings initiated by a regulatory authority (e.g., a state or federal securities agency like the U.S. Securities and Exchange Commission (SEC) or self-regulatory body like the Financial Industry Regulatory Authority (FINRA) and the North American Securities Administrators Association (NASAA) ) for a violation(s) of investment-related rules or regulations. In addition, there have been hundreds of customer complaints filed against Ladenburg Thalmann for misconduct by its securities sales and investment advisory representatives that are not reported by the firm on its Central Depository Record.
We have reported and written about these regulatory problems and customer complaints over many years. Ladenburg Thalmann is a repeat offender: there are over 15 FINRA reported disciplinary proceedings citing the firm with one form of supervisory lapses or another in the last decade.
A BRIEF OVERVIEW OF SOME OF THE REGULATORY PROBLEMS LADENBURG THALMANN & CO. INC. HAS FACED OVER THE YEARS*
Ladenburg Thalmann has been repeatedly censured, warned, and fined millions of dollars for its own misconduct and failure to supervise its army of financial advisors.* A few of the notable FINRA Sanctions for its Supervisory Failures are below:
FINRA Sanctions Ladenburg Thalmann For Numerous Supervisory Lapses
FINRA has investigated Ladenburg Thalmann on numerous occasions and found the brokerage firm violated numerous NASD and NYSE Rules. The allegations include, inter alia failure to evidence approval of research reports and properly disclose securities holdings in research reports; failure to promulgate and enforce policies and procedures concerning employee electronic communications with the public; failure to receive duplicate copies of employee account statements; failure to comply with dual employment rules; failure to conduct branch office inspections; failure to comply with various reporting obligations, including reporting of customer complaints, timely filing of Form U-5s, and filing of accurate annual compliance reports and annual attestations; and the failure to properly apply and account for collateralized mortgage obligations and haircut and undue concentration charges. As a result, FINRA imposed a censure and fined the firm $200,000.
FINRA Orders Ladenburg Thalmann To Pay Over $1.4 million For Charging Customers Excessive Commissions
FINRA investigated and found that Ladenburg Thalmann engaged in practices and procedures that resulted in charging its customers approximately $1.2 million in excessive commissions on proceeds transactions, in violation of NASD Conduct Rule 2440, NASD Interpretive Memorandum 2440(c)(5) (the “Proceeds Rule”), and NASD Conduct Rule 2110, by virtue of violating Sections 17(aX2) and (3) of the Securities Act of 1933. In addition, the firm violated NASD Conduct Rules 3010 and 2110 by failing to establish a supervisory system, including written supervisory procedures, reasonably designed to achieve compliance with the “Proceeds Rule.” For its misconduct, FINRA imposed a censure, ordered, disgorgement of over $1.2 million, and fined the company, $275,000.
FINRA Sanctions Ladenburg Thalmann Multiple Times For Best Execution Failures
FINRA has investigated FINRA has investigated Ladenburg Thalmann on multiple occasions for “Best Execution” failures. The brokerage firm has a duty to execute every transaction promptly and for the best price available in the marketplace at the time and this brokerage firm repeatedly fails to provide 1 of its most fundamental obligations to its customers.
Ladenburg Thalmann was previously censured and fined $5000 and then again $30,000 and required to provide restitution for “Best Execution” violations, and prior to that, an AWC became final wherein Ladenburg Thalmann was censured and fined $92,500, required to provide restitution and required to update its written supervisory procedures for violations of the rules and regulations applicable to firm quotations, best execution, trade-or-move, limit order display, limit order protection, ACT reporting, short sale reporting, record keeping, trade reporting, supervision and for violations of SEC Rule 11 Ac 1-5.
The latest investigation uncovered the failure to execute orders In 44 transactions in MIEC fully and promptly. In 43 of these transactions, Ladenburg Thalmann failed to use reasonable diligence to ascertain the best inter-dealer market and failed to buy or sell in such market so that the resultant price was as favorable as possible under prevailing market conditions. The conduct described above constitutes separate and distinct violations of NASD Conduct Rule 2110 for which it was censured and fined $25,000.
There are two components of good supervisory practices. One is having a set of written supervisory procedures and the other is making sure your financial advisors are following those rules. Apparently, Ladenburg Thalmann still has a problem enforcing its rules when it comes to “Best Execution” of securities transactions.
*Above are only some of the regulatory disciplinary actions filed against Ladenburg Thalmann by FINRA. NASSA and other state securities regulator investigations and enforcement actions account for another 31 BrokerCheck disclosures.
Ladenburg Thalmann Customer Complaints
There have been scores of customer complaints filed against Ladenburg Thalmann stockbrokers and investment advisors over the years. We have launched many investigations of current and former Ladenburg Thalmann advisors.
If you have lost money investing with any of these Ladenburg Thalmann advisors or others within this brokerage firm, it’s important that you reach out to an investment loss attorney quickly because the statutes of limitations can bar your claims. Call us at 800-732-2889.
Why Does Ladenburg Thalmann & Co. Inc. Have So Many Regulatory Problems And Customer Complaints?
Independent broker-dealers are notorious for their lax supervisory practices and procedures. The business model of these franchise type operations is to open many offices nationwide for steady growth of fixed monthly revenues without the costs attendant to a full-service branch office with on-site manager, compliance officer and operation personnel. The registered representatives of these independent broker-dealers generally operate as separately incorporated businesses. They are not employees of the broker-dealer and therefore not controlled in the same manner as full-service brokerage firm representatives. The registered representatives control their structure and costs to maximize profits and often leave the protection of investors’ rights and interests as their lowest priority.
The typical supervisory organization of independent broker-dealer operations is to have other independent contractors operate Offices of Supervisory Jurisdiction (OSJs) to monitor the registered representatives from geographically remote offices and then report to the main franchisor’s compliance office at national headquarters. The supervisors at the OSJs are not employees of the franchisor and often run their own brokerage, insurance and other businesses. They are not devoted full-time supervisors of the smaller branch offices. Consequently, OSJ managers cannot and do not supervise the day-to-day operations of the registered representatives of these Independent broker-dealers.
Generally, there is no immediate review of new accounts opened, securities transactions, business records, cash or securities receipts and deliveries, correspondence and business activities unrelated to the securities brokerage operation at these independent brokerage firms. The lax supervision leaves investors who have transferred their accounts to the smaller independent broker-dealer vulnerable to sales of securities that have not been reviewed or authorized by anyone other than the sales representative earning a commission. There may be no one onsite to detect forgeries of clients’ signatures on documents, the placement of inaccurate information about a client’s investment objectives and financial condition to document the suitability of a particular investment recommendation. Oftentimes there is no daily review of sales literature and client correspondence to protect against misrepresentations and misleading statements being made to investors. In fact, it is not unusual for there to be only one compliance audit visit per year at many of these offices.
These Independent brokerage business operations are worrisome to the North American Securities Administrators Association (NASAA), which has documented more instances of sales abuse and consequently investor losses at these firms than the traditional brokerage firms with branch offices with on-site managers and compliance personnel.
Did Ladenburg Thalmann & Co. Inc. Advisor Misconduct Cause You Investment Losses?
When financial advisor misconduct has caused you to lose substantial value to your investment accounts, you have the right to seek reimbursement from the responsible parties. Ladenburg Thalmann is responsible like any employer for its financial advisors acts and omissions. In addition, it has an independent duty to supervise its stockbrokers and investment advisors. These cases can be extremely complex, and so having the support of a reputable attorney who is experienced in recovering investment losses for investors is key to your success. Many customers make the mistake of contacting Ladenburg Thalmann without representation with an attorney about their complaints and have their complaints denied.
Consult With An Attorney Who Recovers Investment Losses Caused By Ladenburg Thalmann & Co. Inc. Today!
The attorneys at The Law Offices of Robert Wayne Pearce, P.A., have helped countless investors over the last 40 years recover the losses from their investment accounts that were caused by broker negligence or misconduct. The firm has extensive experience with Ladenburg Thalmann cases, and Attorney Pearce is committed to seeing that those responsible for the losses you have suffered are held fully accountable.
Give us a call at 800-732-2889. Let’s discuss your case and see what we can do to help you get the compensation you need and deserve.