According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Michael Leahy (Leahy), previously associated with First Standard Financial Company LLC, has at least 5 disclosable events. These events include 2 customer complaints, 3 regulatory events, alleging that Leahy recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a final customer complaint on April 12, 2022.
Respondent Leahy failed to comply with an arbitration award or settlement agreement or to satisfactorily respond to a FINRA request to provide information concerning the status of compliance.
FINRA BrokerCheck shows a final customer complaint on August 10, 2021.
Respondent Leahy failed to comply with an arbitration award or settlement agreement or to satisfactorily respond to a FINRA request to provide information concerning the status of compliance.
FINRA BrokerCheck shows a pending customer complaint with a damage request of $196,836.19 on June 21, 2021.
Michael Leahy was named in a customer complaint that asserted the following causes of action: churning; qualitative and quantitative unsuitability; failure to supervise; negligent supervision; breach of fiduciary contract and implied covenant of good faith and fair dealing; negligent misrepresentation and omissions; and violation of standards of commercial honor and principles of trade.
FINRA BrokerCheck shows a award / judgment customer complaint with a damage request of $1,363,023.00 on March 05, 2020.
Leahy was named in a customer complaint that asserted the following causes of action: negligence; qualitative and quantitative unsuitability; failure to supervise; breach of fiduciary duty; breach of contract; negligent misrepresentations; omissions; and lost opportunity damages.
FINRA BrokerCheck shows a final customer complaint on January 22, 2020.
Without admitting or denying the findings, Leahy consented to the sanctions and to the entry of findings that he failed to reasonably supervise a former registered representative who, while registered through a member firm, engaged in a pattern of unauthorized trading, using margin without authorization, recommending excessive and otherwise unsuitable transactions, and charging excessive commissions in dozens of customer accounts. The findings stated that Leahy, the sole principal at the firm and the only individual responsible for supervising the representative, was aware of multiple red flags of the representative’s misconduct. The red flags included daily trade blotters that showed frequent in-and-out trading and commissions often exceeding five percent, numerous customer complaints alleging unauthorized trading, unauthorized use of margin, and excessive commissions, and notification from the firm’s clearing firm of potential unauthorized trading by the representative. Leahy did not investigate those red flags or otherwise take reasonable action to curtail the representative’s pattern of misconduct. As a result of Leahy’s failure to reasonably respond to those red flags, the representative’s misconduct continued unabated until the New Jersey Bureau of Securities summarily revoked the representative’s registration in the State of New Jersey.
Financial Advisors providing advice to retail investors are required to adhere to the SEC’s Regulation Best Interest (Reg BI). Reg BI applies a ‘best interest’ standard for broker-dealers and their associated people. This Reg BI standard of care applies to registered representatives making recommendations to customers in the purchase, sale, or exchange of securities or the implementation of investment strategies involving securities and non-securities. The rule also applies to the handling of opening accounts such as account transfers and types of accounts being recommended to be opened. 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.
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. Reg BI was meant to enhance the duties that registered representatives have to their clients by applying fiduciary principles to transactions and investment strategies by prohibiting brokers from placing their own financial interests ahead of the best interests of their client – the investor. Reg BI comes with different key obligations that associated persons must meet in dispensing advice. The care obligation requires registered representatives to carefully evaluate investment options, review the risks and rewards of the investment or service, compare similar products, and ensure that the recommended investment is appropriate for the customer and in the retail investor’s best interest.
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. Finally, the financial advisor must use their knowledge of both their reasonable diligence into investment options as well as their knowledge of the investor’s client specific needs to consider reasonably available investment options. Those investment options must allow the broker to determine that there is a reasonable basis that the recommendation is in the retail 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.
Leahy has been in the securities industry for more than 17 years. Leahy has been registered as a Broker with First Standard Financial Company LLC since 2017.
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.