According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Nigel James (James) has been the subject of at least five customer complaints and one financial matter. Customers have filed complaints against James alleging a number of securities law violations including that the broker made unsuitable investments, misrepresentations and false statements, churning (excessive trading), breach of fiduciary duty, breach of contract, unauthorized trading, among other claims. Most of these claims involve recommendations in equities.
James entered the securities industry in 2002. From October 2005 until October 2008, James was registered with J.P. Turner & Company, L.L.C. From there, James as associated with First Midwest Securities, Inc. until February 2013.
All advisers have a fundamental responsibility to deal fairly with investors including making suitable investment recommendations. In order to make suitable recommendations the broker must have a reasonable basis for recommending the product or security based upon the broker’s investigation of the investments properties including its benefits, risks, tax consequences, and other relevant factors. In addition, the broker must also understand the customer’s specific investment objectives to determine whether or not the specific product or security being recommended is appropriate for the customer based upon their needs.
A number of the complaints involve claims of churning. When brokers engage in churning the investment trading activity in the client’s account serves no reasonable purpose for the investor and is transacted to profit the broker through the generation of commission payments. The elements to establish a churning claim, which is considered a species of securities fraud, are excessive transactions of securities, broker control over the account, and intent to defraud the investor by obtaining unlawful commissions. A similar claim, excessive trading, under FINRA’s suitability rule involves just the first two elements.
The number of complaints and regulatory actions against James is relatively large by industry standards. According to InvestmentNews, only about 12% of financial advisors have any type of disclosure event on their records. Brokers must disclose different types of events, not necessarily all of which are customer complaints. These disclosures can include IRS tax liens, judgments, and even criminal matters.
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 where their broker has acted inappropriately. Our consultations are free of charge and the firm is only compensated if you recover.