According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Brent Foster (Foster), previously associated with J.P. Morgan Securities LLC, has at least 2 disclosable events. These events include 2 customer complaints, alleging that Foster recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $700,000.00 on June 28, 2022.
The Statement of Claim alleges breach of fiduciary duty, violations of the Indiana Uniform Securities Act, and negligence. Advisor denies all allegations. Based on the Claimant’s goals and risk tolerance, Advisor had recommended to and discussed with Claimants private fund investments, which they agreed fit their plans. After discussion with the Advisor and after receiving and reviewing the offering documents, Claimants decided to invest in the private fund investments and completed and signed subscription documents for the investments. Advisor conducted extensive due diligence and continuous monitoring of the investments. In March of 2020, a fund in which Claimant was invested suspended valuations and redemptions, and later explained that it was in a dispute with a sub-advisor. The private fund has resolved its dispute with the sub-advisor in a manner that should provide a substantial recovery for investors. Mr. Foster was the Investment Advisor Representative working directly with Claimant [REDACTED].
FINRA BrokerCheck shows a settled customer complaint on November 19, 2021.
The Statement of Claim alleges breach of fiduciary duty, negligence including negligent due diligence, negligence (overconcentration), breach of contract, failure to supervise, and control person liability. Advisor denies all allegations. Based on the Claimant’s goals and risk tolerance, Mr. Foster had recommended to and discussed with Claimant a private fund investment. After discussion with Foster and after receiving and reviewing the offering documents, Claimant decided to invest in the private fund investment and completed and signed subscription documents for the investment. Advisor conducted extensive due diligence and continuous monitoring of the investment. In March of 2020, the fund in which Claimant invested suspended valuations and redemptions, and later explained that it was in a dispute with a sub-advisor. The private fund has resolved its dispute with the sub-advisor in a manner that should provide a substantial recovery for investors.
Brokers are required to adhere to the SEC’s Regulation Best Interest (Reg BI) standard of care under the Securities Exchange Act of 1934 which establishes a ‘best interest’ standard for broker-dealers and associated persons. Reg BI applies when brokers recommend a retail investor engage in securities transaction or an investment strategy involving one or more securities. Reg BI also applies to financial advice concerning the transfer of funds and opening of accounts. This standard applies when a registered representative is providing investment advice through making recommendations customers and covers securities transaction, investment strategies, and recommendations concerning advice on opening of an account or accounts.
The care obligation also requires the broker to address the client’s specific needs through obtaining specific investment profile information on the client. The associated person typically will ask the customer for information such as the investor’s risk tolerance or ability to withstand account value declines or increases; experience with investments available; investment objectives and goals; investment time horizon; liquidity needs; assets such as investment accounts held at other financial institutions; tax information; their age and retirement plans; and other information that a customer may want to provide to the advisor to help them to properly address the services needed. The SEC has stated that Reg BI is drawn from fiduciary principles that are common to both brokers and investment advisors including an obligation to act in the investor’s best interest and prohibiting an advisor from placing their own interests ahead of the investor’s. There are several different aspects of the rule that brokers must comply with. One of which is the care obligations which require brokers to form a reasonable belief that their investment advice and recommendations are in the retail investor’s best interest. The care obligations include three components. First, the advisor must have an understanding of the potential risks, rewards, and costs associated with a product, investment strategy, account type, or series of transactions.
Another aspect of the care obligation is focusing on the client’s specific needs which brokers must reasonably understand through obtaining information for the client’s investment profile. In completing a customer’s investment profile the advisor should include information such as the investor’s investment time horizon; liquidity needs; risk tolerance; experience with various investment vehicles; investment objectives and financial goals; assets and debts including outside investment accounts; marital status; tax information; age; and other relevant information that may be individual to the investor that the advisor would need to know to properly render advice or provide services. Using the foregoing information, the associated person then must consider reasonably available investment option to accomplish the investor’s goals as well as alternative investment options that may be cheaper or other important qualities. Finally, the advisor must conclude that there is a reasonable basis to believe that the recommendation being provided is in the investor’s best interest. An advisor must understand the type of account, securities, and their client in order to meet their care obligations. The type of securities account has the potential to greatly affect retail customers’ costs and investment returns. Different types of securities accounts can offer different features, products, or services, and not all types of accounts or services would be in every investor’s best interest.
Foster has been in the securities industry for more than 8 years. Foster has been registered as a Broker with J.P. Morgan Securities LLC since 2012.
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.