According to BrokerCheck records financial advisor Herbert Smith (Smith), currently associated with Kestra Investment Services, LLC (Ketra Investment), has been subject to one customer complaint and two tax liens. According to records kept by The Financial Industry Regulatory Authority (FINRA) Smith has been accused by a customers of unsuitable investment advice concerning energy limited partnership investment among other claims. The law offices of Gana LLP continue to report on investor related losses and potential legal remedies due to recommendations to investor in oil and gas and commodities related investments.
In addition, Smith has been subject to two tax liens. The first in May 2014 for $65,692 and the second in July 2016 for $69,542. Tax liens can be sign that a broker may have a conflict of interest to recommend or engage in high risk trades and improper recommendations due to the need to obtain funds. FINRA discloses tax liens information because it is important for investors to know whether or not a broker can manage their own finances.
Our firm is investigating potential securities claims against brokerage firms over sales practices related to the recommendations of oil & gas and commodities products such as exchange traded notes (ETNs), structured notes, private placements, master limited partnerships (MLPs), leveraged ETFs, mutual funds, and individual stocks.
Before recommending investments in oil and gas and commodities related investments, brokers and advisors must ensure that the investment is appropriate for the investor and conduct due diligence on the company in order to understand the risks and prospects of the company. Oil and gas and commodities related investments have been recommended by brokers under the assumption that commodities prices would continue to go up. However, brokers who sell oil and gas and commodities products are obligated to understand the risks of these investments and convey them to clients.
The number of complaints against Smith 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.
Smith entered the securities industry in 1967. Since 2001 Smith has been associated with Kestra Investment out of the firm’s St. Louis, Missouri 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.