Paulson Investment Company LLC (“Paulson Investment Company“) (CRD#5670) has faced numerous complaints filed by FINRA (Financial Industry Regulatory Authority), state regulatory organizations, and investors. If you lost money due to misconduct at Paulson Investment Company, you have legal options to recover your losses.
At the Law Offices of Robert Wayne Pearce, we have thoroughly investigated Paulson Investment Company, its regulatory violations, and customer complaints. We have successfully represented investors with claims of fraud, negligence, and breach of fiduciary duty against this organization and its financial advisors through FINRA arbitration proceedings.
If you believe you have a claim against Paulson Investment Company, you should strongly consider hiring an investment fraud 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 to discuss your case and explore your legal options.
Can I Sue Paulson Investment Company?
If you’ve lost money caused by Paulson Investment Company and/or its employees’ misconduct then the answer is, YES, you can sue Paulson Investment Company, 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 45 years of personal experience in FINRA arbitration proceedings and knows very well how you can not only sue Paulson Investment Company in FINRA arbitration proceedings but WIN that arbitration. The easiest way to know if you have a viable case against Paulson Investment Company is to call Attorney Pearce at our office at 800-732-2889.
How to Sue Paulson Investment Company for Investment Losses
What Can I Do If I Lost Money at Paulson Investment Company?
If you lost money at Paulson Investment Company due to unsuitable investments, fraud, or negligence, you can pursue recovery through FINRA arbitration. FINRA arbitration is a legal process where investors present their case before neutral arbitrators who decide whether the brokerage firm must compensate you for losses.
This process exists because most brokerage agreements contain mandatory arbitration clauses that prevent lawsuits in traditional court. However, arbitration can be just as effective as a lawsuit when you have experienced legal representation because arbitrators understand securities law violations and broker misconduct patterns.
The regulatory problems documented at Paulson Investment Company—including unsuitable structured product recommendations, distribution of unregistered securities, failure to achieve best execution, and improper market timing practices—directly affect investor portfolios. These violations indicate systemic supervisory failures that may have damaged your account through unauthorized trades, excessive fees, or investments that didn’t match your risk tolerance.
FINRA arbitration allows you to recover losses even when you signed an arbitration agreement because federal law guarantees investors the right to pursue claims through this forum. The process typically takes 12-16 months from filing to hearing, and successful claimants can recover actual losses, interest, and sometimes attorney fees depending on the circumstances of the fraud or negligence.
Who Can Help Me Sue Paulson Investment Company?
The Law Offices of Robert Wayne Pearce specializes in representing investors against firms like Paulson Investment Company. We have extensive experience with cases involving independent broker-dealers and understand how their lax supervisory structures create opportunities for misconduct.
Our firm handles the entire arbitration process—from investigating your losses and filing the claim to presenting evidence at the hearing. We evaluate whether the investments in your account were suitable given your financial situation and risk tolerance, review trade records for churning or unauthorized activity, and connect regulatory violations at the firm level to harm in your specific account.
Contact us for a free consultation to determine if you have a viable claim. We will review your account statements, assess the strength of your case, and explain your recovery options without any obligation.
What is Paulson Investment Company?
Paulson Investment Company (CRD#5670) is a registered broker-dealer. It operates as a full-service independent broker-dealer, providing a range of financial products and services to individual investors and financial advisors.
As a registered broker-dealer, Paulson Investment Company is subject to regulations and oversight by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). It is required to comply with industry standards and regulations to ensure the protection of its clients’ interests.
A failure to comply with industry standards by either its brokers or the firm itself can result in disciplinary actions, fines, or other penalties imposed by regulatory authorities.
Why Does Paulson Investment Company Have So Many Bad Reviews and Customer Complaints?
Independent broker-dealers like Paulson Investment Company often have more customer complaints than traditional brokerage firms because of their business structure. These firms operate as franchise-type operations where financial advisors run their own independent businesses rather than working as direct employees.
This creates supervision problems because the firm opens many offices nationwide to generate steady revenue without paying for full-time on-site managers or compliance officers at each location. Instead, other independent contractors oversee these offices remotely from separate locations called Offices of Supervisory Jurisdiction (OSJs).
OSJ managers typically run their own insurance and investment businesses, meaning they don’t supervise day-to-day operations at smaller branch offices. This leads to minimal oversight of new accounts, securities transactions, client records, and correspondence—creating opportunities for misconduct.
Without immediate review of sales activities, advisors can sell unsuitable investments, forge client signatures, or misrepresent investment objectives to justify high-commission products. Many of these offices receive only one compliance audit per year, leaving investors vulnerable to fraud and negligence for extended periods.
The North American Securities Administrators Association (NASAA) has documented higher rates of sales abuse and investor losses at independent broker-dealers compared to traditional firms with on-site supervisors. This pattern explains why firms like Paulson Investment Company accumulate regulatory violations and customer complaints over time.
Paulson Investment Company Has Many Different Regulatory Problems
Paulson Investment Company’s rapid growth has not been without consequences. There have been approximately 32 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 customer complaints filed against Paulson Investment Company 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. Paulson Investment Company is a repeat offender: there are over 32 FINRA-reported proceedings citing the firm with one form of supervisory lapses or another.
A Brief Overview of Some of the Regulatory Problems Paulson Investment Company Has Faced Over the Years*
Paulson Investment Company has been repeatedly censured, warned, and fined 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 Censures and Fines Paulson Investment Company for Unsuitable Structured Product Recommendations
Brief Overview: Without admitting or denying the findings, the Paulson Investment Company consented to the sanctions and to the entry of FINRA findings that it failed to reasonably supervise unsuitable recommendations to purchase variable interest rate structured products (“VRSPS”). According to FINRA, firm representatives made unsuitable recommendations to customers with either low or moderate risk tolerances that they purchase VRSPS, which was unsuitable for those customers considering the substantial risks of VRSPS. In fact, the firm considered VRSPS to be nonconventional investments, and its written supervisory procedures restricted the sale of VRSPS to customers with aggressive or speculative investment objectives and risk tolerances higher than moderate. However, the firm failed to enforce these requirements, including not taking any steps to determine that the securities were suitable for the customers. As a result of the consent order, Paulson Investment Company was fined $175,000.
FINRA Censures and Fines Paulson Investment Company for Distribution of Unregistered Securities
Brief Overview: Without admitting or denying the findings, Paulson investment company consented to the sanctions and to the entry of FINRA findings that it sold private placement offerings claiming exemption from registration under the Securities Act of 1933, but without having established pre-existing, substantive relationships with the offerees prior to participating in those offerings. FINRA stated that as a result, each of those sales constituted an unregistered distribution of securities in contravention of the Act. The firm solicited individuals to invest approximately $4.5 million in those offerings. Though the firm eventually established a substantive relationship with each of the individuals who invested in the offerings prior to their purchases, that relationship did not exist prior to its participation in those offerings. Therefore, the firm was censured and fined $50,000.
Paul Investment Company Censured and Fined by FINRA for Operating More Offices Than Permitted by Membership Agreement
Brief Overview: Without admitting or denying the findings, Paulson Investment Company consented to the sanctions and to the entry of FINRA findings that it was in violation of its membership agreement with FINRA because it operated more offices than permitted under that agreement. FINRA stated that before opening those offices, the firm did not submit a continuing membership application seeking to modify the restriction in the membership agreement limiting the firm to eight offices. In addition, the firm also failed to register three locations as branch offices. As result of the consent order, Paulson Investment Company was fined $50,000.
FINRA Fines Paulson Investment Company for Failure to Achieve Best Price for Customers
Brief Overview: FINRA initiated an investigation that revealed Paulson Investment Company failed to execute orders fully and promptly. According to FINRA, in transactions for or with a customer, the firm 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 to its customer was as favorable as possible under prevailing market conditions. Paulson Investment Company did not admit to or deny the findings but instead consented to sanctions and to the entry of findings and was fined $22,500 and ordered to pay restitution to customers.
NASD Censures and Fines Paulson Investment Company for Improper Market Timing Practices
Brief Overview: Without admitting or denying the allegations, the Paulson Investment Company consented to the described sanctions and to the entry of NASD findings that the firm engaged in market timing practices and failed to establish, maintain, and enforce a supervisory system and written procedures reasonably designed to prevent and detect deceptive market timing activity. According to the NASD, the firm failed to respond adequately to “red flags” that the firm and hedge fund clients were engaged in improper market timing practices and failed to take effective action to address such activities. As a result, the firm was censured and fined $175,000 and required to pay $175,000 in restitution representing the profits obtained by hedge fund clients through market timing activities. The firm was also required to certify that it had reviewed its procedures regarding market timing, late trading, recordkeeping, and responses to regulatory inquiries and established systems and procedures reasonably designed to achieve compliance with applicable laws, regulations, and rules.
*Above are only some of the regulatory disciplinary actions filed against Paulson Investment Company by FINRA. NASAA and other state securities regulator investigations and enforcement actions account for another 27 BrokerCheck disclosures.
Did Paulson Investment Company 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. Paulson Investment Company 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 Paulson Investment Company without representation with an attorney about their complaints and have their complaints denied.
Consult With An Attorney Who Recovers Investment Losses Caused By Paulson Investment Company Today
The investment loss attorneys at The Law Offices of Robert Wayne Pearce, P.A., have helped countless investors over the last 45 years recover the losses from their investment accounts that were caused by broker negligence or misconduct. The firm has extensive experience with Paulson Investment Company 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.
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