The securities lawyers of Gana LLP are investigating customer complaints and a FINRA enforcement action with The Financial Industry Regulatory Authority’s (FINRA) against broker Henry Watson (Watson). According to BrokerCheck records, Watson has been subject to three customer complaints and one FINRA action. The customer complaints against Watson allege a number of securities law violations including that the broker made unsuitable investments, unauthorized trading, portfolio mismanagement, and excessive trading among other claims.
The most recent claim was filed in October 2016 alleging Watson purchased shares of a security from without authorization seeking $13,017. Subsequently in January 2017 FINRA barred Watson for failing to appear to testify concerning an arbitration claim. FINRA claimed that the testimony was requested in connection with an inquiry into an arbitration claim filed by a customer against Watson. FINRA alleged that Watson acknowledges that he received FINRA’s request but would not appear for on-the-record testimony at any time resulting in the bar.
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.
Watson entered the securities industry in 1984. From 2001 until February 2012, Watson was registered with Scott & Stringfellow, LLC. Thereafter, from January 2012 until October 2016, Watson was associated with J.J.B. Hilliard, W.L. Lyons, LLC out of the firm’s Greenville, South Carolina branch office location.
The number of customer complaints against Watson 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.