Thomas Howes (Howes), working out of Bethesda, MD, has been subject to five customer complaints. According to BrokerCheck records, Howes has been accused by customers of unsuitable investment advice and trades.
In one complaint from 2012, customers alleged that from August 2006 until July 2011, there were excessive and unsuitable trades made in their brokerage accounts and a variable annuity that resulted in losses. They alleged damages of $300,500 and the dispute was settled for $130,000.
In another complaint, customers alleged the transactions in their account were not suitable and were awarded a settlement amount of $229,369.99.
Brokers have a responsibility to 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 Howes 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.
Howes has been in the investment industry since 1993. From 1993 until 2000, Howes was registered with Merrill Lynch, Pierce, Fenner & Smith Incorporated. From 2000 until 2008, Howes was registered with Citigroup Global Markets Inc. From February 2008 until June 2009, Howes was with Morgan Stanley & Co. Incorporated. Howes was associated with Morgan Stanley Smith Barney from June 2009 until July 2011. From July 2011 until May 2016, Howes was registered with NYLife Securities LLC. Finally, Howes was registered with IFS Securities from April 2016 until April 2017.
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.