Securities Lawyers Blog
According to BrokerCheck records kept by the Financial Industry Regulatory Authority (FINRA), broker Jeanette Adcock (Adcock) has been sanctioned for allegedly not complying with Illinois Securities Law.
Additionally, Adcock has been subject to three customer disputes in 2017. Moreover, In April 2017, Adcock was “permitted” to resign from Wayne Hummer Investments because she “failed to forward a written customer complaint to her supervisor or compliance department as required.”
In November 2017, a customer alleged that Adcock made misleading statements regarding a risky investment. The customer is requesting $25,000 in damages in this pending dispute.
In January 2017, a customer alleged Adcock misrepresented and recommended unsuitable products. This dispute settled for over $20,000.
The number of events listed on Adcock’s BrokerCheck is high relative to her peers. According to InvestmentNews, only about 12% of financial advisors have any type of disclosure event on their records. Brokers must publicly disclose certain types of reportable events on their CRD including but not limited to customer complaints. In addition to disclosing client disputes brokers must divulge IRS tax liens, judgments, and criminal matters. However, FINRA’s records are not always complete according to a Wall Street Journal story that checked with 26 state regulators and found that at least 38,400 brokers had regulatory or financial red flags such as a personal bankruptcy that showed up in state records but not on BrokerCheck. More disturbing is the fact that 19,000 out of those 38,400 brokers had spotless BrokerCheck records.
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.
False representations include either written or oral statements containing misrepresentations or omissions of information that are material to an investor and induce the purchase, sale, or holding of a security.
Under the Securities Exchange Act of 1934 (15 U.S.C. § 78a et seq.) and Rule 10b-5 a misrepresentation or omission of a fact is material if a reasonable investor might have considered the fact important in the making of the investment decision. Also the Financial Industry Regulatory Authority (FINRA) Rule 2020 also prohibits members from effecting “any transaction in, or induce the purchase or sale of, any security by means of any manipulative, deceptive or other fraudulent device or contrivance.
Adcock has spent 30 years in the securities industry and is currently registered with David A. Noyes & Company in Chicago, Illinois. Previous registrations include Wayne Hummer Investments, Wachovia Securities, Prudential Securities, and Merrill Lynch.
At Gana Weinstein 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.