FINRA Investigating Broker Marc Reda For Possible Trading Rule Violations

shutterstock_120556300The securities lawyers of Gana LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority’s (FINRA) against broker Marc A. Reda (Reda). According to BrokerCheck records, Reda has been subject to fourteen disclosures including seven customer complaints, one Judgment/Lien and one criminal charge, two employment terminations for cause, and one Investigation by FINRA. The customer complaints against Reda allege a number of securities law violations including that the broker made unsuitable investments, breach of fiduciary duty and over concentration of investments in customer’s account among other claims. Five customer complaints have been filed against Reda in 2016 alone.

The most recent customer complaint was filed In June 2016 alleging breach of fiduciary duty and recommending unsuitable investments causing $100,000.00 in damages while employed with PHX Financial Inc (PHX Financial).  In April  2016, another customer alleged unauthorized trading occurred in the customer’s account and breach of his fiduciary duty. This claim settled for $85,000.  FINRA records disclose an Internal Revenue Service lien filed in the Supreme Court of Richmond County in 2011 against Reda in the amount of $575,101.  The inability of a broker to manage his own finances can be a red flag indicator that the broker may be tempted to sell high fee products to clients for the broker’s own benefit.

In addition, Reda is under investigation by FINRA in which the agency claims to be reviewing both current and former clients of Reda and the respective activity in the accounts to see if there were any rule violations.

Reda entered the securities industry in 1999. From June  2010 until May 2013, Reda was associated with John Thomas Financial. From May 2013 until November 2013, Reda was associated with Clark Dodge & Co Inc. From November 2013 until October 2014, Reda was associated with Laidlaw & Company. From October 2014 until January 2016, Reda was associated with PHX Financial. From February 2016 until May 2016, Reda was associated with First Standard Financial Company.  Finally, since May 2016, Reda has been registered with Spartan Capital Securities out of the firm’s New York, New York branch office location.

The number of customer complaints against Reda 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.

The investment lawyers at Gana LLP represent investors who have suffered investment losses due to allegations of wrongdoing. 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.