FINRA Sanctions Broker Andrew Corbman Over Unsuitable ETF Investments

shutterstock_174922268The securities lawyers of Gana LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against broker Andrew Corbman (Corbman).  According to BrokerCheck records Corbman has been subject to at least nine customer complaints, one employment termination, one financial disclosure, two judgments or liens, and one regulatory action initiated by FINRA.  The customer complaints against Corbman allege securities law violations that including unsuitable investments, overconcentration of investments, and violations of industry rules among other claims.

In addition, in February 2016, FINRA settled a regulatory action (FINRA No. 2010024620302) against Corbman alleging that he made recommendations that were unsuitable and over-concentrated and exposed customers to a risk of loss that exceeded each customer’s risk tolerance and investment objectives.  Some of the securities in question involved leveraged and non-traditional exchange traded funds (ETFs).  FINRA also found that Corbman distributed a sales brochure for an alternative mutual fund to his customers that contained information that was misleading and failed to provide a sound basis for evaluating the alternative mutual fund.  As a result, FINRA suspended Corbman for one month.

In addition, Corbman has had trouble managing his personal finances and in September 2015 declared bankruptcy.

Brokers have a responsibility treat investors fairly which includes obligations such as making only suitable investments for the client.  In order to make a suitable recommendation the broker must meet certain requirements.  First, there must be reasonable basis for the recommendation the product or security based upon the broker’s investigation and due diligence into the investment’s properties including its benefits, risks, tax consequences, and other relevant factors.  Second, the broker then must match the investment as being appropriate for the customer’s specific investment needs and objectives such as the client’s retirement status, long or short term goals, age, disability, income needs, or any other relevant factor.

The number of events listed on Corbman brokercheck 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.

Corbman entered the securities industry in 1994.  From February 2008 until January 2011 Corbman was associated with FSC Securities Corporation.  From January 2011 until November 2015, Corbman was registered with Kovack Securities Inc.  From November 2015 until March 2016, Corbman was associated with Newbridge Securities Corporation out of the firm’s Lansdowne, Virginia office location.

The investment fraud attorneys at Gana LLP represent investors who have suffered securities losses due to the mishandling of their accounts.  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.