Advisor Serge Parakhnevich Has Complaints and Regulatory History

shutterstock_836360-300x225The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that Serge Parakhnevich, currently employed by PHX Financial, Inc. (PHX), has been subject to at least three customer complaints and one regulatory sanction in his career. According to records kept by the Financial Industry Regulatory Authority (FINRA), Parakhnevich customer complaints allege that Parakhnevich engaged in unsuitable investment practices and excessive trading, among other allegations made by customers.  Also, the regulatory sanction claims that Parakhnevich fraudulently traded in the account of a customer without approval.

In August 2020, FINRA made findings in a consent order that Parakhnevich violated the securities laws by executing trades in a customer’s accounts without the customer’s prior written authorization or his member firm’s approval of the account as discretionary. The findings stated that Parakhnevich completed and submitted firm compliance questionaries wherein he falsely answered questions related to whether he handled customer accounts on a discretionary basis. Without admitting or denying the findings, Parakhnevich consented to the sanctions. Parakhnevich was issued a $7,500 fine along with all his registration capacities being suspended for forty-five days.

In April 2020, a customer complained that Parakhnevich violated the securities laws by alleging that Parakhnevich engaged in unsuitable investment practices. The claim alleges $249,281 in damages and is pending.

In August 2015, a customer complained that Parakhnevich violated the securities laws by alleging that Parakhnevich engaged in unauthorized trading, excessive trading, and churning. The claim alleged $100,000 and was denied.

Brokers are required under the securities laws to treat their clients fairly.  This obligation includes the duties to disclose material risks of the investments they recommend and to present products, particularly complex or confusing products, in a fair and balanced manner that allows the client to evaluate the recommendation.  Another important obligation advisors have is to make only suitable recommendations for investments to the client.  There are many investments that are not appropriate for most investors or for certain investors given their risk tolerance, age, and other factors.  Advisors should not present these investment options to clients.  There are two screens that advisors must employ to determine whether an investment is suitable for a client.  First, there must be a reasonable basis for the recommendation – meaning that the product has been investigated and due diligence conducted into the investment’s features, benefits, risks, and other relevant factors.  The advisor must conclude that the investment is suitable for at least some investors and some securities may be suitable for no one.  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.

According to newsources, a study revealed that 7.3% of financial advisors had a customer complaint on their record when records from 2005 to 2015 were examined.  Brokers must publicly disclose reportable events on their BrokerCheck reports that include customer complaints, IRS tax liens, judgments, investigations, terminations, and criminal cases.  In addition, research has shown a disturbing pattern with troublesome brokers where brokers with high numbers of customer complaints are not kicked out of the industry but instead these brokers are sifted to lower quality brokerage firms with loose hiring practices and higher rates of customer complaints.  These lower quality firms may average brokers with five times as many complaints as the industry average.

Parakhnevich entered the securities industry in 2008. From March 2008 through June 2009, Parakhnevich was registered with Clark Dodge & Co., Inc. From June 2009 through May 2010, Parakhnevich was registered with Brookstone Securities, Inc. From May 2010 through September 2010, Parakhnevich was registered with Alexander Capital, L.P. From September 2010 through December 2011, Parakhnevich was registered with Clark Dodge & Co., Inc. From December 2011 through June 2013, Parakhnevich was registered with John Thomas Financial. From June 2013 through April 2015, Parakhnevich was registered with Aegis Capial Corp. Since April 2015, Parakhnevich has been registered with and employed by PHY Financial Inc., out of the firm’s New York, New York office location.

Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation.  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.

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