According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker M Schreiber (Schreiber), previously associated with Aegis Capital Corp., has at least one disclosable event. These events include one regulatory event, alleging that Schreiber recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a final customer complaint on October 31, 2022.
Without admitting or denying the findings, Schreiber consented to the sanctions and to the entry of findings that he exercised discretion without written authorization. The findings stated that Schreiber exercised discretionary trading authority when he executed securities transactions in customer accounts. The customers did not provide Schreiber with prior written authorization for his use of discretion, and his member firm did not approve the accounts as discretionary. The findings also stated that Schreiber caused the firm to make and preserve inaccurate and incomplete books and records. Schreiber improperly marked 181 order tickets as ‘unsolicited’ when in fact he had solicited them because he had recommended the transactions to the customers, causing the firm to maintain inaccurate books and records with respect to these trades. In addition, Schreiber used his personal email address to communicate with firm customers about securities transactions in their firm accounts. Schreiber did not disclose his use of his personal email to the firm, or provide the firm with copies of his electronic correspondence with the customers, causing the firm to maintain incomplete records of his business-related communications. Schreiber also falsely stated on the firm’s annual compliance questionnaires that he did not exercise discretionary authority in any customer accounts, and that he did not use a personal email address for business-related communications.
In the financial industry advisors must meet the requirements of the SEC’s Regulation Best Interest (Reg BI) in providing investment advice and services. Reg BI established a ‘best interest’ standard for brokerage firms and registered representatives. 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 brokers make recommendations to retail customer for any securities transaction or investment strategy involving securities, including recommendations of types of accounts.
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. 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. Reg BI comes with different core obligations that brokers must comply with. There is the duty of care obligation requiring financial advisors to form a reasonable belief that their investment advice and recommendations are in the retail investor’s best interest among other duties. In order to do that the broker must evaluate the potential risks, rewards, and costs associated with a product, account type, or series of transactions being recommended.
Next, the advisor must have a reasonable understanding of the specific retail investor’s investment profile. The customer’s profile information generally includes an investor’s financial situation and needs; investments; assets and debts; marital status; tax status; age; investment time horizon; liquidity needs; risk tolerance; investment experience; investment objectives and financial goals; and any other information the retail investor may disclose in connection with the recommendation or advice. Finally, the advisor must use their knowledge of the first two elements to consider reasonably available investment option alternatives and come to the conclusion that there is a reasonable basis to believe that the recommendation or advice being provided is in the retail investor’s best interest. Brokerage firms and advisors must also understand the features and limitations of various account types as part of meeting Reg BI’s care obligations. Firms typically offer a variety of account options and services with different trading costs, services, such as account and activity monitoring. An advisor’s recommendation as to what type of securities account to open can alter the customers’ overall costs and investment returns. The advisor must determine that the client can benefit from the type of account being recommended to be opened and in the investor’s best interest taking into account the costs, benefits, and needs of the client.
Schreiber has been in the securities industry for more than 40 years. Schreiber has been registered as a Broker with Aegis Capital Corp. since 2016.
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.