According to BrokerCheck records financial advisor John Schneider (Schneider), formerly employed by PWA Securities, Inc. (PWA Securities), has been subject to five customer complaints and one regulatory action. According to records kept by The Financial Industry Regulatory Authority (FINRA), in August 2017 a customer filed a complaint alleging that Schneider made unsuitable recommendations, over-concentration of accounts, and failed to supervise. The claim is currently pending.
In June 2017 a customer claimed that after receiving a 50% return of principal on a real estate private placement investment the investment became worthless.
In July 2016 a customer alleged unauthorized trading, inadequate supervision, and unsuitable investments that took place from June of 2010 through May of 2016 causing $100,000 in damages. The claim was settled for $60,000.
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 Schneider 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.
Schneider entered the securities industry in 1993. From January 2008 until September 2017 Schneider was registered with PWA Securities out of the firm’s Pittsburgh, Pennsylvania 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.