Broker Investigation: Financial Advisor Thomas Baumann

shutterstock_125120213According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Thomas Baumann (Baumann) has been the subject of at least 2 customer complaints and two judgements or liens. Customers have filed complaints against Baumann alleging securities law violations including claims of unsuitable investments and misrepresentations among other claims. In 2013, a customer complained that Baumann made misrepresentation and was pressured into making a speculative investment. In December 2014, another customer complained that Baumann used high pressure sales tactics causing $159,404 in damages. In addition, Baumann has two tax liens. One tax lien dated March 2012 is for $56,887 and another dated February 2012, is for $11,463. Judgements are often a sign that the broker cannot manage their own personal finances and may be tempted to recommend high commission products or strategies to clients in order to satisfy debts.

Baumann entered the securities industry in 2007. From September 2007, until May 2010, Baumann was registered with JHS Capital Advisors, Inc. From May 2010, until October 2010, Baumann was associated with Brookstone Securities, Inc. From October 2010, until February 2013, Baumann was a registered representative of Rockwell Global Capital LLC. Since January 2013, Baumann has been associated with Spartan Capital Securities, LLC out of the firm’s Garden City, New York office location.

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.

The number of customer complaints against Baumann is high relative to his peers. According to InvestmentNews, only about 12% of financial advisors have any type of disclosure event on their records. Brokers must publicly disclose certain types of reportable events on their CRD including but not limited to customer complaints. In addition to disclosing client disputes brokers must divulge IRS tax liens, judgments, and criminal matters. However, FINRA’s records are not always complete according to a Wall Street Journal story that checked with 26 state regulators and found that at least 38,400 brokers had regulatory or financial red flags such as a personal bankruptcy that showed up in state records but not on BrokerCheck. More disturbing is the fact that 19,000 out of those 38,400 brokers had spotless BrokerCheck records.

Gana LLP represents investors who have suffered investment losses due to broker wrongdoing, such as unsuitable investments. The majority of these claims may be brought in securities arbitration before FINRA. Our consultations are free of charge and the firm is only compensated if you recover.