According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Tony Barouti (Barouti), currently associated with Emerson Equity LLC, has at least 2 disclosable events. These events include one customer complaint, one regulatory event, alleging that Barouti 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 $122,000.00 on September 30, 2025.
Violation of Federal Securities Laws; Violations of California Securities Laws; California Unfair, Unlawful and Fraudulent Business Practices; Violation of California’s Elder Abuse Law; Breach of Contract; Common Law Fraud; Breach of Fiduciary Duty; Negligence and Gross Negligence. Trades placed in 2018 & 2019
FINRA BrokerCheck shows a final customer complaint on August 11, 2025.
The Securities and Exchange Commission (‘Commission’) deems it appropriate and in the public interest that public administrative and cease-and-desist proceedings be, and hereby are, instituted against Tony Barouti (‘Barouti’ or ‘Respondent’). In anticipation of the institution of these proceedings, Respondent has submitted an Offer of Settlement which the Commission has determined to accept. The commission finds that These proceedings arise out of Respondent’s failures to comply with Regulation Best Interest in connection with recommendations of GWG Holdings, Inc. (‘GWG’) corporate bonds called ‘L Bonds’ to retail customers between June 30, 2020, the compliance date for Regulation Best Interest, and April 12, 2021 (the ‘Relevant Period’). During the Relevant Period, Barouti, a registered representative with a dually registered broker-dealer and investment adviser, Broker-Dealer A, willfully violated Regulation Best Interest’s Care Obligation, Exchange Act Rule 15l-1(a)(2)(ii), when he recommended L Bonds to 10 retail customers without exercising reasonable diligence, care, and skill to have a reasonable basis to believe the recommendation was in the best interest of each particular customer based on that retail customer’s investment profile and the potential risks, rewards, and costs associated with the recommendation (the ‘Customer-Specific’ prong of the Care Obligation). As a result of Respondent’s willful violations of Regulation Best Interest’s Care Obligation, he also willfully violated Regulation Best Interest’s General Obligation. Exchange Act Rule 15l-1(a)(1).
In the financial industry advisors must meet the requirements of the SEC’s Regulation Best Interest (Reg BI) in providing investment advice and services. Reg BI established a ‘best interest’ standard for brokerage firms and registered representatives. 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.
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 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.
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. 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. In addition to specific investments being recommended, under Reg BI, a broker must also understand the type of account that their client would need in order to meet their care obligations. The SEC has stated that the type of securities account an investor has can greatly affect a customers’ costs and overall investment returns. Further, different account types can offer and support different features, products, securities, or services, and account type would not be appropriately applied in a one size fits all manner.
Barouti entered the securities industry in 1998. Barouti has been registered as a Broker with Emerson Equity 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.