According to BrokerCheck records financial advisor James Allen (Allen), now associated with David A. Noyes & Company (David Noyes), has been subject to seven customer complaints and one employment termination for cause. According to records kept by The Financial Industry Regulatory Authority (FINRA) Allen has been accused by customers of unsuitable investment advice, breach of fiduciary duty, fraud, and negligence among other claims. The most recent complaint filed in April 2017.
In addition, Citigroup Global Markets Inc. (Citigroup) allowed Allen to resign in April 2017 after the firm made allegations that Allen was investigated for violations of the firm’s policies on communications with clients, and three inaccurate client profiles.
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 Allen 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.
Allen entered the securities industry in 1992. From May 2007 until April 2017 Allen was associated with Citigroup. Since May 2017, Allen has been registered with David Noyes out of the firm’s Skokie, Illinois 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.