Broker Investigation: Customer Complaints Against Advisor Christian Herrera

shutterstock_183554579Attorneys at Gana LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against Christian Herrera (Herrera) alleging unsuitable investments and unauthorized trading among other claims.  According to brokercheck records Herrera has been subject to five customer complaints, one financial disclosure – a bankruptcy, and one regulatory event.

A customer filed a complaint in October 2013 alleging that the broker made unsuitable recommendations by over-concentrating their leading to $39,229 in losses.  The claim was settled for $14,000.

Brokers in the financial industry have the fundamental responsibility to treat investors fairly.  This obligation includes making only suitable investments for their client.  The suitable analysis has certain requirements that must be met before the recommendation is made.  First, there must be reasonable basis for the recommendation for the investment based upon the broker’s and the firm’s investigation and due diligence.  Common due diligence looks into the investment’s properties including its benefits, risks, tax consequences, the issuer, the likelihood of success or failure of the investment, and other relevant factors.  Second, if there is a reasonable basis to recommend the product to investors the broker then must match the investment as being appropriate for the customer’s specific investment needs and objectives.  These factors include the client’s age, investment experience, retirement status, long or short term goals, tax status, or any other relevant factor.

Herrera entered the securities industry in 2000.  From February 2009 through October 2015, Herrera was registered with Spartan Capital Securities, LLC.  Finally, since September 2015 Herrera has been associated with Laidlaw & Company (UK) Ltd. out of the firm’s New York, New York office location.

The number of events listed on Herrera 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.

Gana LLP’s securities fraud attorneys represent investors who have suffered securities losses due to the mishandling of their accounts due to claims of fraud and negligence.  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.