The securities lawyers of Gana LLP are investigating customer complaints against former LPL Financial LLC (LPL Financial) Broker Daniel Pugel (Pugel). According to BrokerCheck records, in March 2017, Pugel was “permitted to resign” from Financial Advocates Investment Management after allegedly violating investment-related statutes, regulations, rules, and/or industry standards of conduct, including FINRA Rule 2310 (suitability). Pugel has received three customer complaints.
In 2016 a customer alleged Daniel Pugel, while employed at Financial Advocates Investment Management, made unsuitable investment recommendations, failed in his supervisory duties, breached his fiduciary duty, and violated blue sky laws. The complaint settled in 2017 for $215,000.
In 2004 a customer alleged Daniel Pugel, while employed at Morgan Stanley, breached of contract, breached his fiduciary duty, made unsuitable recommendations, and committed fraud in connection to a mutual fund investment. The complaint resulted in an award to the customer of more than $95,900.
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 Pugel are unusual compared to his peers. According to news sources, 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 increasingly inaccurate and understate broker misconduct as studies have shown that 96.9% of broker requests to clean their records of complaints are granted.
Pugel entered the securities industry in 1998 and has been registered with LPL Financial LLC in Seattle, Washington since 2002. He was previously registered with Morgan Stanley DW Inc. in Purchase, NY from 1998 until 2002.
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.