According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) a complaint has been filed against Ameriprise Financial Services, Inc. (Ameriprise) broker Joseph Grund (Grund) alleging more than $20,000,000 in losses through the mismanagement of the customer’s account. The complaint alleges that Grund concentrated the investors in only two stock positions on margin and misrepresented the safety of the investments.
The allegations concern activity that occurred from 2010 through 2014 that left the investors’ accounts down 84.5% while the broader market has been up more than 50%. Grund allegedly sold more than $146,000,000 in securities in the investors accounts with large concentrations in Arch Coal and Allied Nevada Gold Corp. stocks. While the clients allegedly suffered huge losses, Grund received in excess of $2,000,000 dollars in commissions and margin interests.
The action against Grund is only one of several cases our firm is tracking concerning unsuitable investments for high net worth clients. Earlier this year a $400 million complaint was filed against Morgan Stanley Wealth Management and adviser Ami Forte (Forte) and branch manager Terry McCoy (McCoy) alleging that they engaged in excessive trading (churning), unauthorized use of discretion, and abused their fiduciary duty. According to the complaint, the firm made approximately 12,000 unauthorized trades generating an eye popping $40 million in commissions.
Unfortunately, these types of cases are becoming increasingly common. Our firm has handled a number of cases where a wealthy investor has been taken advantage of due to many different circumstances including diminished capacity. In other cases a spouse who inherits or assumes management over an affluent estate has very little financial experience and places their trust in their brokerage firm and financial advisor only to be charged millions in fees and high commission products. Often times these financial strategies are completely unreasonable and unjustifiable. Wealthy investors often have financial needs that do not exceed even a tiny fraction of their overall net worth. Yet, there have been cases where brokers place sizable portions of their client’s massive estates at jeopardy just to satisfy the broker’s need to generate millions in fees while providing absolutely no benefit for their client.
Investors who have suffered losses may be able recover their losses through securities arbitration. The attorneys at Gana LLP are experienced in representing investors in cases of unsuitable investments. Our consultations are free of charge and the firm is only compensated if you recover.