According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Andrew Elsoffer (Elsoffer), previously associated with Stifel, Nicolaus & Company, Incorporated, has at least 2 disclosable events. These events include one customer complaint, one regulatory event, alleging that Elsoffer recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a final customer complaint on February 25, 2022.
Without admitting or denying the findings, Elsoffer consented to the sanctions and to the entry of findings that he exercised discretion without written authorization in customer accounts. The findings stated that although the customers understood that Elsoffer was conducting trading in their accounts, none of them provided prior written authorization for him to exercise discretion in their accounts. In addition, Elsoffer\\u2019s member firm did not accept these accounts as discretionary. The findings also stated that Elsoffer assisted his firm customer, who was a close friend but not an immediate family member, with renovating his home at a time when the customer was unable to oversee the renovations himself. He loaned the customer a total of $13,703 to pay to the contractors renovating the home. The customer then reimbursed Elsoffer via three checks totaling $2,703 drawn on his firm account and two checks totaling $11,000 drawn on his bank account. Elsoffer did not disclose or seek prior approval from the firm for the loans. The findings also included that Elsoffer initially provided false information to FINRA. FINRA requested that Elsoffer provide a signed statement addressing his termination from the firm and allegations that he had violated firm policy. In Elsoffer\\u2019s written response, he misrepresented that all check writing was done from the customer\\u2019s firm account. FINRA later asked Elsoffer whether, in addition to the three checks written from the firm account, the customer had written Elsoffer additional checks from any bank accounts and if so, to provide all supporting documentation. In his written response, Elsoffer misrepresented that no other checks existed. Elsoffer later corrected his prior misstatements by producing personal bank statements and two additional cancelled checks drawn on the customer\\u2019s bank account totaling $11,000.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $250,000.00 on February 27, 2020.
Claimants allege common law fraud, negligence, breach of fiduciary duty breach of contract.
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. 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.
Next, the broker must understand the investor’s investment background and profile. A customer’s profile includes information that describes the investor’s financial situation and needs. Information here will include their outside securities accounts and investments; relevant assets and debts; tax bracket; age; liquidity needs; risk tolerance; investment time horizon; experience with investing; investment objectives; and any other relevant information that the investor may choose to disclose pertinent to their situation. 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. 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. Finally, an advisor must also analyze the specific account features offered and determine whether their client can benefit from them in order to meet their care obligations. While securities and investments come with costs that must be considered, the type of securities account also has changes the cost equation for the investor and can change the retail customers’ future investment returns. The associated person must consider the different types of securities accounts for their client and determine whether or not the cost or features are reasonably needed for the client or if the customer’s current account costs and features are superior to solutions available to the advisor. In any event, the type of account and services recommended must be in the investor’s best interest.
Elsoffer has been in the securities industry for more than 23 years. Elsoffer has been registered as a Broker with Stifel, Nicolaus & Company, Incorporated since 2011.
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.