According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker David Mcdonnell (Mcdonnell), previously associated with Tcfg Wealth Management, LLC, has at least 2 disclosable events. These events include one customer complaint, one regulatory event, alleging that Mcdonnell recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a pending customer complaint with a damage request of $450,000.00 on August 09, 2022.
Mr. McDonnell and the [REDACTED] entered into a real estate agreement outside of the firm. The [REDACTED] allegedly invested in real estate in the UK with Mr. McDonnell’s mother, prior to becoming a client of TCFG.
FINRA BrokerCheck shows a final customer complaint on March 22, 2022.
Without admitting or denying the findings, McDonnell consented to the sanction and to the entry of findings that he refused to provide documents and information that FINRA requested in connection with an investigation into the circumstances giving rise to McDonnell’s termination from his former member firm. The findings stated that the firm filed a Form U5 stating that it had terminated McDonnell’s employment because he had participated in a private securities transaction by issuing promissory notes and conducted an outside business activity by serving as a trustee of a trust.
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. 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.
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. The Reg BI rule applies a fiduciary principles and requires an associated person to act in the retail investor’s “best interests” while barring the broker from placing their own financial interests and compensation incentives ahead of the investor’s best interest. 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.
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. The associated person must then apply both their reasonable diligence into various investment options as well as the information gathered as to the investor’s specific needs when considering the investment recommendation. The broker must explore various alternative investment options available to address these needs and determine that there is a reasonable basis to believe that the recommendation or service being recommended 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.
Mcdonnell has been in the securities industry for more than 34 years. Mcdonnell has been registered as a Broker with Tcfg Wealth Management, LLC 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.