According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Warynex Hernandez (Hernandez), previously associated with UBS Financial Services Incorporated of Puerto Rico, has at least 2 disclosable events. These events include 2 customer complaints, alleging that Hernandez 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 $200,000.00 on December 14, 2020.
Time frame: unspecified\<char_lb_r>\, \<char_lb_r>\, Allegations: Claimant alleges that the recommendation to invest in and hold Puerto Rico closed-end funds was unsuitable and that his account was over-concentrated in these investments. He also alleges that the risks of investing in and concentrating in PR investments were misrepresented.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $25,000.00 on May 21, 2020.
Time Frame: February 1, 2012 to May 31, 2013\<char_lb_r>\, \<char_lb_r>\, What were the allegations against the individual? \<char_lb_r>\, The client’s attorney alleges the Financial Advisor concentrated the account into a single proprietary closed end Puerto Rican municipal Bond Fund. The client’s attorney alleges the investments were unsuitable as they were illiquid and highly leveraged funds.. The client’s attorney alleges the Financial Advisor misled the client to the safety of the fund.
When your financial advisor is providing advice they must adhere to the SEC’s Regulation Best Interest (Reg BI) rule and standard of care. Reg BI replaced the former “suitability” rule and created 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. Reg BI is drawn from fiduciary principles that include an obligation to act in the retail investor’s best interest and the broker is prohibited from placing their own interests ahead of the investor’s interest. There are different sub-parts of the Reg BI rule that financial professionals must comply with when providing advice. Among those is the duty of care obligation that mandates associated persons to evaluate investment options, review and be knowledgeable the risks and rewards of the investment or service, compare alternative investment products, and ensure that the overall investment strategy aligns with the client’s goals and is in their best interests.
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.
Hernandez has been in the securities industry for more than 13 years. Hernandez has been registered as a Broker with UBS Financial Services Incorporated of Puerto Rico since 2005.
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.