Paulson Investment Company LLC (“Paulson Investment Company”) (CRD#5670) 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 Paulson Investment Company, 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 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. 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 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 40 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.
Investment Losses? We Can Help
Discuss your legal options with an attorney at The Law Offices of Robert Wayne Pearce, P.A.
or, give us a ring at (800) 732-2889.
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.
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 $150,000.
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 $150,000 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.
Paulson Investment Company Customer Complaints
There have been scores of customer complaints filed against Paulson Investment Company stockbrokers and investment advisors over the years. We have launched many investigations of current and former Paulson Investment Company advisors:
- Andre Davis of Paulson Investment Company, LLC
- John Tarpinian of Paulson Investment Company, LLC
- Donald Wojnowski Of Paulson Investment Company
- Kevin Graetz Formerly With Paulson Investment Company
- Timothy Touloukian formerly with Paulson Investment Company LLC
- John Nole of Paulson Investment Company LLC
If you have lost money investing with any of these Paulson Investment Company 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 Paulson Investment Company 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 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.
Related Read: Can You Sue Your Brokerage Firm?
Investment Losses? We Can Help
Discuss your legal options with an attorney at The Law Offices of Robert Wayne Pearce, P.A.
or, give us a ring at (800) 732-2889.
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 40 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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