Advisor Marc Reda Sanctioned by FINRA Over Unauthorized Trading

shutterstock_176351714-300x200According to BrokerCheck records financial advisor Marc Reda (Reda), formerly associated with Spartan Capital Securities, LLC (Spartan Capital), has been subject to eight customer complaints, three employment terminations for cause, one judgment or lien, one regulatory action, and one criminal matter.  According to records kept by The Financial Industry Regulatory Authority (FINRA) Reda has been accused by customers of unsuitable investment advice, breach of fiduciary duty, and unauthorized trading among other claims.

The most recent complaint filed in June 2016 alleging breach of fiduciary duty and unsuitable recommendations causing $100,000 in damages.  The claim has been settled.

In addition, in June 2017 FINRA sanctioned and suspended Reda alleging that Reda exercised discretion in customers’ accounts without written authorization from the customers.  Further, FINRA determined that Reda failed to timely disclose on his Form U4 a federal tax lien filed against him in the amount of $575,101.

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 complaints against Reda are unusual compared to his peers.  According to newsources, only about 7.3% of financial advisors have any type of disclosure event on their records among brokers employed from 2005 to 2015.  Brokers must publicly disclose reportable events on their CRD customer complaints, IRS tax liens, judgments, investigations, and even criminal matters.  However, studies have found that there are fraud hotspots such as certain parts of California, New York or Florida, where the rates of disclosure can reach 18% or higher.  Moreover, according to the New York Times, BrokerCheck may be becoming increasing inaccurate and understate broker misconduct as studies have shown that 96.9% of broker requests to clean their records of complaints are granted.

Reda entered the securities industry in 1999.  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 (UK) Ltd.  From October 2014 until January 2016, Reda was registered with PHX Financial, Inc.  From February 2016 until May 2016 Reda was registered with First Standard Financial Company LLC.  Finally, since May 2016 Reda was associated with Spartan Capital out of the firm’s New York, New York office location.

At Gana LLP, our attorneys are experienced representing investors who have suffered securities losses due to the mishandling of their accounts.  Claims may be brought in securities arbitration before FINRA.  Our consultations are free of charge and the firm is only compensated if you recover.