Brokerage Firm Review: Truist Investment Services, Inc.

Truist Investment Services, Inc. (“Truist Investment Services”) (CRD#17499) 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 Truist Investment Services, 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 Truist Investment Services, 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 Truist Investment Services?

If you’ve lost money caused by Truist Investment Services and/or its employees’ misconduct then the answer is, YES, you can sue Truist Investment Services, 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 Truist Investment Services in FINRA arbitration proceedings but WIN that arbitration. The easiest way to know if you have a viable case against Truist Investment Services 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.

Get A Free Consultation

or, give us a ring at (800) 732-2889.

What is Truist Investment Services?

Truist Investment Services (CRD#17499) 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, Truist Investment Services 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.

Truist Investment Services Has Many Different Regulatory Problems 

Truist Investment Services’ rapid growth has not been without consequences. There have been approximately 12 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 many customer complaints filed against Truist Investment Services 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. Truist Investment Services is a repeat offender: there are over 12 FINRA-reported proceedings citing the firm with one form of supervisory lapses or another.

A Brief Overview of Some of the Regulatory Problems Truist Investment Services Has Faced Over the Years*

Truist Investment Services has been repeatedly censured, warned, and fined multi-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 Censures and Fines Truist Investment Services for Failure to Supervise Non-Traditional ETF Holdings in Customer Accounts

Brief Overview: Without admitting or denying the findings, Truist Investment Services consented to the sanctions and to the entry of FINRA findings that it failed to establish, maintain, and enforce a supervisory system reasonably designed to achieve compliance with FINRA’s suitability rule concerning non-traditional exchange traded funds, specifically in connection with certain of the risks associated with non-traditional ETFs, including the risks associated with holding them for extended periods. FINRA stated the firm did not have reasonable procedures or guidance to representatives or supervisors regarding how to determine whether a non-traditional ETF was suitable for customers given the unique features and risks of those products. In addition, FINRA stated the firm did not have any systems in place to assist in monitoring the holding periods for non-traditional ETFs.  FINRA alleged there was no evidence that anyone at the firm conducted a customer specific suitability analysis for such positions held for periods longer than one day, nor did the supervisory procedures require such an analysis. These supervisory failures resulted in losses of $584,466.13 in firm customer accounts. As a result of the investigation, the firm was censured and fined $50,000.

FINRA Censures and Fines Truist Investment Services for Investment Advisory Fee Overcharges

Brief Overview: Without admitting or denying the findings, Truist Investment Services consented to the sanctions and to the entry of FINRA findings that it failed to establish, maintain, and enforce a supervisory system reasonably designed to monitor the proper assessment of fees charged to certain investment advisory accounts. FINRA stated that the firm overcharged investment advisory fees to nearly 1,000 client accounts enrolled in one of the firm’s investment advisory programs. FINRA said the overcharges resulted from the installation of new fee engine software by the firm’s clearing firm that, without the firm’s knowledge, failed to correctly bundle certain asset classes for the purpose of calculating breakpoint discounts for fees. However, the firm failed to discover the investment advisory fee overcharges for a period of approximately two and a half years. The firm failed to conduct adequate periodic reviews to ensure that the proper fees were assessed for certain investment advisory accounts. Apart from being assessed a fine of $80,000, the firm reimbursed all affected clients in the total amount of approximately $421,743 plus interest.

FINRA Censures and Fines Truist Investment Services for Inadequate Disclosures Regarding Auction Rate Securities

Brief Overview: Without admitting or denying the findings, Truist Investment Services consented to the described sanctions and to the entry of findings that the firm used materials with customers and prospective customers that were not fair and balanced and did not provide a sound basis for evaluating the facts regarding purchases of auction rate securities. According to FINRA, the materials used by the firm failed to adequately disclose the risks of investing in ARS, including the risk that ARS auctions could fail, could become illiquid, and that customers might be unable to obtain access to funds invested in ARS for substantial periods of time. FINRA also found the materials used by the firm made inappropriate comparisons between ARS and other materially different investments. In addition to the foregoing, FINRA said the firm failed to establish and maintain a supervisory system, including written supervisory procedures, and failed to establish and maintain procedures that were reasonably designed to ensure that it marketed and sold ARS in compliance with the federal securities laws and applicable NASD and MSRB rules. As a result, the firm was censured and fined $400,000.

FINRA Censured and Fines Truist Investment Services for Unit Investment Trust and Closed-End Fund Transactions in Elderly Customers’ Accounts

Brief Overview: FINRA initiated an investigation into Truist Investment Services and alleged that through former brokers, the firm engaged in a pattern of unsuitable short-term unit investment trust, closed-end fund, and mutual fund transactions in the accounts elderly and unsophisticated customers listed as moderate investors with limited investment experience. FINRA also alleged the firm also recommended unsuitable transactions on margin in customers’ accounts, failing to disclose to the customers the risks and costs associated with trading on margin, and lacking a reasonable basis for believing that such recommendations were suitable given each customer’s investment objectives, financial situation and needs. The firm approved the unsuitable short-term UIT and CEF transactions, including transactions placed using margin, but failed to respond adequately to red flags indicating that brokers were engaged in a pattern of unsuitable short-term trading of UITs and CEFs and unsuitable use of margin, including concentration of such positions. As a result, the firm was censured and fined $900,000.

FINRA Censures and Fines Truist Investment Services for Failure to Monitor its Fee-Based Accounts for Commissions in Addition to Management Fees

Brief Overview: FINRA initiated an investigation into Truist Investment Services and alleged that the firm opened over 2,500 fee-based brokerage program accounts without properly assessing whether the accounts were appropriate for its customers. FINRA stated the firm failed to adequately monitor the activity in the accounts to ensure that they remained appropriate for its customers. According to FINRA, the firm’s procedures provided that registered representatives should determine the suitability of portfolio accounts based on trading activity, but at least 36 accounts that conducted no trades for at least eight consecutive quarters were charged over $129,000 in fees during the last four inactive quarters. Hence, FINRA found the firm failed to establish and enforce a supervisory system and procedures reasonably designed to protect customers from being assessed both a commission on transactions and a fee on those same assets when held in accounts. As a result, the firm was censured and fined $700,000.

Why Does Truist Investment Services 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 Truist Investment Services 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. Truist Investment Services 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 Truist Investment Services 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.

Get A Free Consultation

or, give us a ring at (800) 732-2889.

Consult With An Attorney Who Recovers Investment Losses Caused By Truist Investment Services 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 Truist Investment Services 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.

Robert Wayne Pearce

Robert Wayne Pearce of The Law Offices of Robert Wayne Pearce, P.A. has been a trial attorney for more than 40 years and has helped recover over $170 million dollars for his clients. During that time, he developed a well-respected and highly accomplished legal career representing investors and brokers in disputes with one another and the government and industry regulators. To speak with Attorney Pearce, call (800) 732-2889 or Contact Us online for a FREE INITIAL CONSULTATION with Attorney Pearce about your case.

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