Securities Lawyers Blog
The securities attorneys at Gana Weinstein LLP are currently investigating Joseph Stone Capital L.L.C. (Joseph Stone) broker Laurence Pettit (Pettit). According to BrokerCheck records, Pettit has been subject to 10 customer disputes, two civil actions, and one criminal action. The majority of these disputes allege Pettit’s improper use of discretion, unauthorized trading, improper use of margin, and failure to follow customer instructions.
In March 2009, a customer alleged that Pettit failed to follow instructions to liquidate the investments in the customers’ account on multiple occasions. The dispute was settled at $250,000.
In October 2008, a customer alleged that Pettit failed to follow the customer’s instructions to reduce the margin percentage on the account. This dispute was settled at $40,000.
In September 2008, a customer alleged that in 2007, Pettit misrepresented the material facts of Mad River Fund LP, a hedge fund investment.
In addition, Pettit was subject to two liens. In October 2015, Pettit was subject to a civil lien of $73,008. In February 2011, Pettit was subject to a civil lien $105,207.74. Large liens are potential signs that a broker is struggling to manage their finances. FINRA provides this information to the public because it is material for consumers to know whether or not their advisor’s financial situation influences the advisor’s recommendations.
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.
In addition, the number of disclosures with respect to Pettit is high relative 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.
Pettit entered the securities industry in 1992 and has been registered with Joseph Stone Capital from 2018. From September 2011 to May 2018, Pettit was registered with Windsor Street Capital LP, which is now expelled by FINRA. From October 2000 to July 2011, Pettit was registered with Anderson & Strudwick, Incorporated. From May 1999 to November 2000, Pettit was registered with Scott & Stringfellow, Inc.
Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation. You may be able recover losses through securities arbitration. The attorneys at Gana Weinstein LLP are experienced in representing investors in cases of brokerage firms failure to supervise their representatives. Our consultations are free of charge and the firm is only compensated if you recover.