FREE INITIAL CONSULTATION WITH ATTORNEYS WHO CAN HANDLE YOUR SECURITIES, COMMODITIES AND INVESTMENT PROBLEMS

The Law Offices of Robert Wayne Pearce, P.A. understands what is at stake in securities, commodities and investment law matters and constantly strives to secure the most favorable possible result. Mr. Pearce provides a complete review of your case and fully explains your legal options. The firm works to ensure that you have all of the information necessary to make a sound decision before any action is taken in your case.

For dedicated representation by a law firm with substantial experience in all kinds of securities, commodities and investment disputes, contact the firm by phone at 561-338-0037, toll free at 800-732-2889 or via e-mail. We may also be able to arrange a meeting with you at offices located in Boca Raton, Fort Lauderdale, Miami and West Palm Beach, Florida and elsewhere.

Pearce Law Firm Client Wins $2.55 Million Against Investment Advisor

This was a sad case of financial abuse by an ex-spouse of another taken to arbitration by Robert Pearce and Adam Kara of The Law Offices of Robert Wayne Pearce, P.A.  (the “Pearce Law Firm”) for one of its clients. The Pearce Law Firm represented Elizabeth Snyder who filed claims against her ex-husband, Barry Snyder, for allegedly mismanaging her investment accounts through highly speculative, excessive and unsuitable trading strategy when he was employed as her stockbroker and later when he acted as her investment adviser at Glenwick Capital Holdings, LLC. In the Spring of 2015, in breach of his fiduciary duties as an investment adviser, Mr. Snyder allegedly misrepresented that Mrs. Snyder needed to transfer almost all of the Snyder Trust to a new investment vehicle, Linkster Holdings, LLC, for estate planning purposes when Mr. Snyder was about to be fired and become unemployable in the securities industry and setting up a “family office” to avoid registration with the regulators.  No one told Mrs. Snyder that he was fired and under investigation for misconduct even though he still continued to manage her accounts with the assistance of other employees at his former employer’s brokerage firm. Shortly after being terminated at that brokerage firm, Mr. Snyder caused Claimants’ accounts to be transferred to Montecito Advisors, Inc. and another brokerage firm where he allegedly crushed Mrs. Snyder financially through the same highly speculative, excessive and unsuitable at those brokerages.  Within a few short months, Mrs. Snyder’s life savings were wiped out. Mrs. Snyder alleged that Mr. Snyder’s actions were in contravention of his “fiduciary duty”  to act in his investment advisory clients’ “best interest” and industry standards of conduct such as FINRA Rules of Conduct 2110, 2111 (f/k/a 2310), and 2120, which state: 2110. Standards of Commercial Honor and Principles of Trade A member, in the conduct of its business, shall observe high standards of commercial honor and just and equitable principles of trade. 2111. Suitability (a) A member or an associated person must have a reasonable basis to believe that a recommended transaction or investment strategy involving a security or securities is suitable for the customer, based on the information obtained through the reasonable diligence of the member or associated person to ascertain the customer’s investment profile.  A customer’s investment profile includes, but is not limited to, the customer’s age, other investments, financial situation and needs, tax status, investment objectives, investment experience, investment time horizon, liquidity needs, risk tolerance, and any other information the customer may disclose to the member or associated person in connection with such recommendation.                                  * * * 2120.      Use of Manipulative, Deceptive or Other Fraudulent Devices No member shall effect any transaction in, or induce the purchase or sale of, any security by means of any manipulative, deceptive or other fraudulent device or contrivance.                                  * * * Mr. Snyder’s recommendations and trading in Mrs. Snyder’s accounts were allegedly breaches of FINRA’s suitability rule, which has long been applied to recommended “investments” and “investment strategies.”  Mr. Snyder allegedly misrepresented the “investments” and “investment strategies” to Mrs. Snyder as safe and suitable.  The over-concentration, over-leverage, and excessive risks taken in the accounts were allegedly not fully disclosed to Mrs. Snyder until it was too late. Mr. Snyder’s acts and omissions not only allegedly violated his fiduciary duties, the FINRA standards of commercial honor and principles of trade, but also included the alleged use of manipulative, deceptive, and fraudulent devices and other FINRA Conduct Rule violations. As we indicated above, Mr. Snyder lost every dollar in Mrs. Snyder’s accounts.  She was forced to sell her home, jewelry, etc. to support herself and children after the suffering the investment losses. No law firm other than the Pearce Law Firm was willing to take the case on a contingency fee basis, and we did so, successfully! The Pearce Law Firm sought an award of over $ 4,093,067 in market adjusted compensatory damages, or alternatively, $3,495,883 in net-out-of-pocket compensatory damages plus pre-judgment interest, attorney fees, expert witness fees, and costs. The arbitration award indicates the Panel was apprised of the amounts of settlements with other Respondents and requested to deduct those amounts from the compensatory damages before the award was entered. The Panel then entered an Award of $2,554,896 in compensatory damages but denied Claimants request for prejudgment interest, attorney fees, expenses, etc. Free Initial Consultation With Securities, Commodities and Investment Dispute Lawyers Serving Investors Nationwide If you have had your accounts mismanaged by Barry Snyder or any other stockbroker, investment adviser and/or trustee, and heard similar misrepresentations, received unsuitable recommendations, please call our office. The Law Offices of Robert Wayne Pearce, P.A. understands what is at stake in securities and commodities law matters and investment disputes, and works tirelessly to secure the best possible result for you and your case.  Mr. Pearce provides a complete case review, identifies the strengths and weaknesses of your case, and fully explains all of your legal options.  The entire law firm works to ensure that you completely understand the ins and outs of the legal process to give you complete peace of mind knowing that you have chosen the best possible representation for your case.

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How to File a Complaint Against Your Financial Advisor

When you hire a financial advisor, you expect the advisor to act in your best interest to prevent unnecessary losses. Unfortunately, however, financial advisors do not always live up to these expectations. In some cases, a financial advisor fails to follow an investor’s requests and guidelines or otherwise engages in misconduct, causing the investor to suffer losses. When this happens, the investor may be able to file an official complaint against the financial advisor through the Financial Industry Regulatory Authority (FINRA). In this article you will learn how to file a complaint against a financial advisor to recover your losses.

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Excessive Buying and Selling of Securities to Generate Commissions Is Called Churning – Is It Happening to You?

Many people often ask, Is churning illegal? The answer is yes. SEC regulations and FINRA rules prohibit the practice of making excessive purchases or sales of securities in investor accounts for the primary purpose of generating commissions, known as churning. Despite the illegality of churning, FINRA filed 190 arbitration actions for the year of 2020 through the end of December against brokers accused of the practice. If you suffered losses in your investment account as a result of excessive trading, contact a churning fraud lawyer to determine whether you are entitled to recover compensation.  What Is Churning in Finance? Churning, also known as excessive trading, takes on a new meaning in the financial industry that doesn’t have anything to do with butter. Excessive trading occurs when a broker makes multiple trades in a customer’s investment account for the primary purpose of generating high commissions. Churning often results in significant losses for investors. The SEC’s Regulation Best Interest, or Reg BI, establishes a standard of conduct for broker-dealers and their employees when recommending investments to retail customers. Reg BI requires brokers to act in the customer’s best interest and not place his or her own interests ahead of those of the investor. Churning is almost never in the best interest of the investor—even those with aggressive trading strategies. Signs Your Advisor Is Churning in Your Investment Account Churning stocks leads to substantial investor losses, especially in situations where it lasts for a long period of time. Many times, investors fail to recognize the indicators that their broker committed the crime of excessive trading until it is too late. There are a number of cautionary signs to look out for when you fear your financial advisor is excessively trading in your account. Unauthorized Trades Unauthorized trading occurs when a broker trades securities in your investment account without receiving prior authorization. If you have a discretionary investment account, your financial advisor has authorization to make trades in your account without seeking your approval for each transaction; however, your broker is still bound by the best interest standard. Excessive trading can be more difficult to detect with a discretionary account. Numerous unauthorized trades appearing on your account statement is a cause for concern. To recognize these transactions, you should review your account statement on a monthly basis and verify the information provided. If you observe unauthorized trades on your account statement, notify your broker and broker-dealer immediately.  Unusually High Trade Volume A high volume of trading activity in a short period of time can signify churning, especially for investors pursuing a conservative investment strategy. Pay special attention to transactions involving the purchase and sale of the same securities over and over. Attorney Robert Pearce has over 40 years of experience representing clients whose brokers’ misconduct caused financial losses. Mr. Pearce’s extensive experience enables him to recognize indicators of churning immediately and prove the amount of damages you suffered as a result of your broker’s misconduct.  Excessive Commission Fees Unusually high commission fees appearing on your account statement is another indication of excessive trading. If the commission fees jump significantly from one month to the next, or if one segment of your investment portfolio consistently generates higher commissions than any other segment, there is a chance your broker is churning your account. Account statements do not typically include fee amounts charged for each individual transaction. Thus, do not hesitate to contact your broker-dealer to request an explanation of the commissions charged to your account. If you feel you are being charged excessive fees in your investment accounts, contact The Law Offices of Robert Wayne Pearce, P.A., to discuss your options.  Contact Our Office Today for a Free Consultation Churning in the financial industry can result in monetary sanctions and even disqualification from the financial industry in extreme cases. The practice involves the manipulation and deception of investors that entrust their brokers to act in their best interest, warranting severe punishment. Robert Wayne Pearce has handled dozens of churning cases and can provide a complete review of your account statements to determine whether excessive trading occurred. Additionally, The Law Offices of Robert Wayne Pearce, P.A., employs experts that can perform a churning analysis of the trading activity in your account to establish concrete evidence that the practice occurred. We have the experience, expertise, and commitment to obtain the damages you deserve. Contact our office today for a free case evaluation.

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FINRA Know Your Customer Rule and Investment Suitability—How Does it Apply to You?

FINRA regulates the conduct of brokers in the securities industry to protect investors from suffering losses due to financial advisor misconduct. The agency formulates rules to outline the behavior expected of broker-dealers and financial advisors when dealing with their investment clients. Nevertheless, FINRA receives thousands of customer complaints every year alleging violations of FINRA Rules. FINRA Rule 2090, the Know Your Customer (KYC) rule, and FINRA Rule 2111, the suitability rule, mandate minimum knowledge requirements for brokers when making investment recommendations and commonly appear in these customer complaints.  If you suffered investment losses due to unsuitable investment recommendations, The Law Offices of Robert Wayne Pearce, P.A., can help you determine if your broker violated one of these rules. Contact our office today for a free consultation. FINRA Rule 2090: Know Your Customer Rule FINRA Rule 2090, or the Know Your Client rule, requires financial advisors to know the “essential facts concerning every customer and concerning the authority of each person acting on behalf of such customer” when opening and maintaining a client investment account. The “essential facts” described in the rule include details that are required to: Service the account effectively; Satisfy any special handling instructions for the account; Understand the authority of anyone acting on the customer’s behalf; and Comply with applicable laws, regulations, and rules. The KYC rule protects clients from investment losses by requiring their financial advisor to learn detailed information about their personal financial circumstances. The rule protects financial advisors by outlining the essential information about customers at the outset of the relationship, prior to any recommendations. Additionally, the financial adviser receives notification of any third parties authorized to act on the customer’s behalf. The Know Your Client rule acts in tandem with the suitability rule, FINRA Rule 2111. The information learned by financial advisors through the KYC requirement factors into the analysis of whether an investment recommendation is suitable.  FINRA Rule 2111: Suitability Alleged violation of investment suitability requirements resulted in 1,220 customer complaints filed with FINRA in 2020 alone, down from 1,580 complaints in 2019. The suitability rule requires financial advisors to have a “reasonable basis” to believe that a recommended transaction or investment strategy is suitable for the customer. A financial advisor determines the suitability of a transaction or investment strategy through ascertaining the customer’s investment profile. Factors involved in a suitability analysis include the customer’s: Age, Investment experience, Financial situation, Tax status, Investment goals, Investment time horizon, Liquidity needs, and Risk tolerance. Numerous cases interpret the FINRA suitability rule as requiring financial advisors to make recommendations that are in the best interest of their customers. FINRA outlines situation where financial advisors have violated the suitability rule by placing their interests above the interests of their client, including: A broker who recommends one product over another to receive larger commissions; Financial advisors who recommend that clients use margin to purchase a larger number of securities to increase commissions; and Brokers who recommend speculative securities with high commissions because of pressure from their firm to sell the securities. Any indication that a financial advisor has placed his or her interests ahead of the client’s interest can support a claim for a violation of the suitability rule. Rule 2111 consists of three primary obligations: (1) reasonable basis suitability, (2) customer-specific suitability, and (3) quantitative suitability. Reasonable Basis Suitability Reasonable basis suitability requires a financial advisor to have a reasonable basis to believe, based on reasonable diligence, that a recommendation is suitable for the public at large. A financial advisor’s reasonable diligence should provide him or her with an understanding of risks and rewards associated with the recommended investment or strategy. A failure to comprehend the risks and rewards associated with a particular investment prior to recommending the investment to a client can result in allegations of misrepresentation or fraud. If a broker fails to perform reasonable diligence regarding either component, the financial advisor violates this obligation. Customer-Specific Suitability Customer-specific suitability involves considering the specific details about an individual customer to determine if a transaction or investment strategy is suitable. The financial advisor reviews the details outlined above to determine the suitability of a particular transaction or strategy for each customer. Quantitative Suitability The quantitative suitability element requires financial advisors to recommend transactions that are suitable when viewed as a whole, not only when viewed in isolation. This element aims to prevent financial advisors from making excessive trades in a client’s account solely for the purpose of generating commission fees. Factors such as turnover rate, cost-equity ratio, and use of in-and-out trading indicate that the quantitative suitability obligation was violated. What Constitutes “Reasonable Diligence”  FINRA’s suitability rule requires brokers to exercise “reasonable diligence” in attempting to obtain customer-specific information. The reasonableness of a financial advisor’s effort to obtain such information will depend on the facts and circumstances of each investment relationship. A financial advisor typically relies on the responses provided by the customer in compiling information relevant to the customer’s investment profile. Some situations may prevent a broker from relying exclusively on a customer’s responses, including times when: A financial advisor poses misleading or confusing questions to a degree that the information-gathering process is tainted; The customer exhibits clear signs of diminished capacity; or Red flags exist that indicate the information may be inaccurate. Additionally, the suitability rule requires brokers to consider any other information provided by the customer in connection with investment recommendations.  Hiring an Investment Loss Attorney Violation of FINRA Rules 2090 and 2111 result in significant financial losses for investors every year. If you suffered losses because of unsuitable investment recommendations, you have the right to seek compensation from the parties responsible for your losses.  Cases against brokers and registered investment advisors can be complex for attorneys without experience in securities law.  Robert Wayne Pearce has over 40 years of experience representing investors in disputes against financial advisors and broker dealers. Mr. Pearce has tried, arbitrated, and mediated hundreds of investment-related disputes involving complex securities and FINRA rule violations. In fact, Mr. Pearce serves...

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LPL Financial LLC Sued For Scott Lanza’s Sales Of REITs And BDCs

LPL Financial LLC (“LPL”) is a securities brokerage firm with offices in Boca Raton, Florida and elsewhere. It is regulated by Financial Industry Regulatory Authority (“FINRA”).  LPL offered and sold to Claimants the investments at issue in this arbitration, namely, non-traded Real Estate Investment Trusts and Business Development Companies through Scott Lanza (“Mr. Lanza”) an individual registered with FINRA as an “Associate Member” of LPL.  The brokerage firm LPL has been sued because it is vicariously liable for Mr. Lanza’s acts, omissions and other misconduct described more fully herein.

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How to Sue a Financial Advisor Over Investment Losses

If you have lost a significant amount of money in your investment portfolios you may be asking yourself can you sue your financial advisor to help recover your losses. Can I Sue My Financial Advisor? Yes, you can sue your financial advisor. If you lost money on investments due to either a financial advisor’s advice or their failure to comply with FINRA’s rules & regulations, you have the right to file an arbitration claim to seek financial compensation. Investment Losses? Let’s talk. or, give us a ring at 561-338-0037. People hire financial advisors and brokers to grow and protect their money. Financial advisors have advanced education and training, which should provide their clients with valuable insight and accurate financial advice. Individual investors expect that their advisors will not defraud or harm them in any other way. Market volatility is difficult to predict with any certainty. Markets dip and rebound over time. A financial advisor must guide you through those difficult times and offer you sound investment advice to minimize or avoid losses.  Some investments are riskier than others. Brokers and financial advisors need to understand their clients’ risk tolerance, as well as their clients’ investment needs. Losses could ruin years of hard work and financial planning.  Market volatility is one thing—negligence, deception, and fraud are something else entirely. Therefore, you should review your portfolio closely to see if you are a victim of misconduct.

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Solicited vs. Unsolicited Trades: Understanding the Difference

Ideally, hiring a skilled broker takes some of the risk out of investing. Unfortunately, however, some brokers fail to act with the appropriate level of integrity. As an investor, it’s very important to understand the difference between solicited and unsolicited trades. The distinction has significant consequences on your ability to recover losses from a bad trade. What’s the Difference Between Solicited and Unsolicited Trades? Solicited trades differ from unsolicited trades based on who originally suggested the trade. A solicited trade is one “solicited” by the broker; in other words, the broker sees the potential trade and recommends it to the investor. As a result, the broker is ultimately responsible for the consideration and execution of the trade because he or she brought it to the investor’s attention. In contrast, unsolicited trades are those initially suggested by the investor. The responsibility for unsolicited trades therefore lies primarily with the investor, while the broker merely facilitates the investor’s proposed transaction.

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What Is a Broker CRD Number?

Brokers and brokerage firms in the United States must register with the Financial Industry Regulatory Authority (FINRA). Without registering, firms and individuals may not conduct security transactions. By maintaining a registration system, FINRA can better monitor and record the activities of registered brokers. FINRA offers a free online service for investors to check the history of their brokers for suspensions, sanctions, or other FINRA actions. What Is a Broker CRD Number? FINRA manages the Central Registration Depository (CRD) program. This program covers the licensing and registration of individuals and firms in the securities industry in the United States. When a broker or firm registers with FINRA, the regulator assigns them a CRD number. Investors can use a broker’s CRD number to check that broker’s work history and disciplinary record using BrokerCheck. 

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Non-Discretionary Accounts vs. Discretionary Accounts

When investors first set up an account with a brokerage firm, that account is designated as either discretionary or non-discretionary. Unfortunately, many investors are simply unaware of the status of their account or what it means. This is usually because investment brokers fail to properly explain each type of account. However, knowing what kind of investment account you have is important. The claims available to a victim of investment fraud or broker misconduct depend on the status of your account.

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FINRA Statute of Limitations: A Brief Overview

Investment brokers have a duty to treat their clients honesty and with integrity. Those who take advantage of, mislead, or steal from their clients shake the investing industry’s foundation. Regrettably, broker misconduct occurs all too often.  You need representation from an attorney who has the knowledge, skill, and extensive experience to help you recover your losses if you are a victim of investment broker misconduct. Robert Wayne Pearce and his staff with The Law Offices of Robert Wayne Pearce, P.A., have over 40 years of experience fighting on behalf of investors victimized by broker misconduct. Contact us today to protect your rights. 

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