Regulation Best Interest’s Due Care obligation requires brokers to use reasonable diligence, care, and skill when recommending securities, strategies, or account types to retail customers. Unlike the old suitability standard, brokers must weigh risks, rewards, and costs, avoid putting their interests first, and ensure trading is not excessive when transactions are viewed together as well.
Continue ReadingThe Law Offices of Robert Wayne Pearce, P.A. filed its first claim against UBS Puerto Rico, alleging a retiree was steered into a concentration of Puerto Rico bonds and closed-end “bond funds.” The claim says the advisor described the strategy as safe and “constitutionally protected,” while misrepresenting risks, failing to diversify, and causing substantial damages.
Continue ReadingA retired couple alleges a Santander Securities broker persuaded them to invest their $500,000 life savings in Westernbank preferred stock, calling it an “insured investment” and urging them to hold as it collapsed. When Westernbank failed, the FDIC paid stockholders nothing and the couple lost nearly everything. Our firm investigates suitability, fraud, and supervision failures.
Continue ReadingFinally, ten years after the Dodd Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank) was enacted to bring about sweeping changes to the securities industry, the best regulation the U.S. Securities & Exchange Commission (“SEC”) could pass, SEC Regulation Best Interest, is now the law governing broker-dealers giving investment advice to retail customers. Although the SEC had the authority to impose a uniform and expansive “Fiduciary Duty” standard throughout the country upon broker-dealers and investment advisors, it yielded to the stock brokerage industry demands and enacted Regulation Best Interest (“Reg. BI”), which is better than the Financial Industry Regulatory Authority (“FINRA”) “Suitability Rule,” but not the best that it could have been done to protect investors. Last month FINRA amended its Suitability Rule to conform with SEC Reg. BI and made it clear that stockbrokers now uniformly have duties related to disclosure, care, conflicts and compliance, which are equivalent to the common law “fiduciary duty” standard when making recommendations to retail customers. See, FINRA Regulatory Notice 20-18. 1
Continue ReadingUBS Financial Services, Inc. is being sued over alleged misconduct by a financial advisor in its Florida and Ohio offices for recommending an unsuitable credit-line investment strategy to an elderly widow. The complaint alleges breach of fiduciary duty, misrepresentation, unsuitable leverage, and negligent supervision tied to securities-backed lending and resulting losses.
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