Securities Lawyers Blog
The law offices of Gana Weinstein LLP recently filed a complaint on behalf of an investor against Rockwell Global Capital, LLC (Rockwell), accusing the firm of making unsuitable recommendations and failing to properly supervise one of its financial advisers. In or around July 2013, the client alleged that he received a cold call from Rockwell financial adviser, Patrick Lofaro. A cold call is when someone solicits and individual who was not anticipating such an interaction. Cold calling is a technique used by a salesperson to contact individuals who have not previously expressed an interest in the products or services that are being offered.
It was alleged that Mr. Lofaro aggressively pursued the client’s investment related business and that Mr. Lofaro convinced him that he could build a diversified portfolio with minimal risk to the client. In reliance upon Mr. Lofaro’s assurances, the Claimant alleged that he opened an account with Rockwell in or around August 2013. Over a seven-month period, the Claimant invested a substantial sum with Rockwell which represented close to 50% of his liquid net worth. The complaint alleges that Mr. Lofaro, rather than create a suitable portfolio, implemented a high-leverage, excessive trading strategy that generated a high amount of commissions without providing any material benefit to the Claimant.
According to the complaint, over the course of just over a year, Mr. Lofaro executed nearly one-hundred-forty (140) trades into and out of thirty-five (35) different stocks, including seventeen (17) small caps, two (2) initial public offerings (IPO’s), eight (8) penny stocks, and fifteen (15) different stocks that were more than twice as volatile as the S&P 500. The complaint alleges that Mr. Lofaro created a portfolio laden with risk while providing no material benefit to the Claimant. Mr. Lofaro’s investment strategy ultimately cost the Claimant an estimated $837,131, while Mr. Lofaro received over $261,080 in commissions.
The Complaint alleges that Rockwell disregarded the investor’s risk tolerance and investment profile, if the firm even gathered the information accurately in the first instance, when Mr. Lofaro put the Claimant’s money into an entirely unsuitable trading strategy in violation of FINRA Rule 2111. The Compliant also alleges that Rockwell was or should have been aware of the risks inherent to the trading strategy and that the investment was inapposite given Claimant’s circumstances. In relation to the alleged inappropriate and unsuitable investments, Rockwell has also been accused of violating FINRA Rules, namely failure to supervise and other FINRA rules that prohibit firms from providing misleading and unbalanced communications.
The attorneys at Gana Weinstein LLP are experienced in handling claims on behalf of investors who have lost money in their portfolio as a consequence of broker misconduct. Contact us today if you believe that your broker has mishandled your account. Our consultations are free of charge and the firm is only compensated if you recover.