According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Michael Haffling (Haffling), previously associated with Arete Wealth Management, LLC, has at least 7 disclosable events. These events include 7 customer complaints, alleging that Haffling 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 $730,000.00 on September 14, 2021.
SALE OF UNSUITABLE, ILLIQUID, HIGH-RISK AND HIGH COMMISSION INVESTMENTS TO CLAIMANTS IN THEIR INDIVIDUAL AND IRA ACCOUNTS.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $10,000.00 on August 17, 2021.
Claimant alleging violations of federal and state securities laws, breach of contract, common law fraud, breach of fiduciary duty, and negligence and gross negligence.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $730,000.00 on July 21, 2021.
SALE OF UNSUITABLE, ILLIQUID, HIGH-RISK AND HIGH COMMISSION INVESTMENTS TO CLAIMANTS IN THEIR INDIVIDUAL AND IRA ACCOUNTS.
FINRA BrokerCheck shows a settled customer complaint on March 29, 2021.
Claiming unsuitable and over concentrated recommendations.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $18,331.00 on December 01, 2020.
Failure to conduct reasonable due diligence and examine the private placement company’s representations and disclosures prior to recommending the investments to Claimants
FINRA BrokerCheck shows a settled customer complaint with a damage request of $120,000.00 on July 06, 2020.
Claimant alleges that Kalos Capital did not conduct reasonable due diligence and review the issuer’s representations and disclosure prior to recommending the investment. Mr. Haffling and Kalos Capital deny these claims.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $150,000.00 on April 22, 2020.
Claimant alleges numerous violations of FINRA rules on the one under-performing security. These allegations are the result of the purchase on a single security on 4/29/2016. The allegations include lack of proper due diligence and high commissions.
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. 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. 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.
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. 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 several different aspects of the rule that brokers must comply with. One of which is the care obligations which require brokers to form a reasonable belief that their investment advice and recommendations are in the retail investor’s best interest. The care obligations include three components. First, the advisor must have an understanding of the potential risks, rewards, and costs associated with a product, investment strategy, account type, or series of transactions.
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. 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. 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.
Haffling has been in the securities industry for more than 19 years. Haffling has been registered as a Broker with Arete Wealth Management, LLC since 2022.
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.