Securities Lawyers Blog
According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Anna Marie Lovell (Lovell), currently associated with Infinity Financial Services, has at least one disclosable event. These events include one customer complaint, alleging that Lovell 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 $50,000.00 on March 25, 2024.
Allegations include lack of warning about the risks of the investment, improper disclosure, lack of service, misrepresented professional capabilities, violations of rules, regulations, and statutes, among others. \, \, In 2020, Anna met with the clients for a discovery meeting on how to invest their recent insurance settlement to address their retirement income needs. Anna learned that one client was already retired and the spouse was planning on retiring within the next few years. One of the clients expressed their sophistication and understanding of economics due to their higher education level. Anna provided the clients with various investment opportunities, in an investment market with near 40 year lows on long term treasury bond interest rates. Investment opportunities ranged from stocks, bonds, mutual funds, and ETF’s. The expected income generated at the time was less appealing to the clients than a higher risk, higher yield non-traded alternative investment debt. I explained the material facts, circumstances, risks, etc. Of the investment to the clients. After several months, during which investments were discussed in detail and an income needs analysis occurred, the clients decided to invest into GWG’s highest yielding highest risk 7-year option after I thoroughly explained that they should consider Long Term Care insurance and ladder the GWG L-Bond term to mitigate risks. However, the clients were willing to accept additional risk for higher income generation during historically low interest rates.
Brokers are required to adhere to the SEC’s Regulation Best Interest (Reg BI) standard of care under the Securities Exchange Act of 1934 which establishes a ‘best interest’ standard for broker-dealers and associated persons. 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 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 requires brokers to form a reasonable belief that their investment advice and recommendations are in the retail investor’s best interest. The care obligations includes 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 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. 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.
Brokerage firms and advisors must also understand the features and limitations of various account types as part of meeting Reg BI’s care obligations. Firms typically offer a variety of account options and services with different trading costs, services, such as account and activity monitoring. An advisor’s recommendation as to what type of securities account to open can alter the customers’ overall costs and investment returns. The advisor must determine that the client can benefit from the type of account being recommended to be opened and in the investor’s best interest taking into account the costs, benefits, and needs of the client.
Lovell entered the securities industry in 2008. Lovell has been registered as a Broker with Infinity Financial Services since 2019.
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.