Securities Lawyers Blog
According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Christopher Brothers (Brothers), currently associated with Maxim Group LLC, has at least 3 disclosable events. These events include 3 customer complaints, alleging that Brothers 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 $1,000,000.00 on July 23, 2024.
The customer alleges that due to alleged misrepresentations and breaches of fiduciary duties he and his limited liability company incurred losses in excess of $1,000,000.
FINRA BrokerCheck shows a pending customer complaint with a damage request of $300,000.00 on July 23, 2024.
The statement of claim brought on behalf of six separate claimants alleges unsuitable recommendations, misrepresentation and breach of fiduciary duty in connection with the purchase of a private placement. Mr. Brothers was not the registered representative for each of the six claimants. The statement of claim alleges over $300,000 in compensatory damages.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $5,000.00 on January 18, 2024.
Client alleges that Maxim Group, LLC, through its agent Christopher Brothers, made unsuitable recommendations, over concentrated investments in high-risk securities, false statement of fact, misrepresentations or omissions of material fact, breach of contract, negligent supervision, and breach of fiduciary duty. The alleged activity occurred in 2014.
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 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 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. 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.
Brothers entered the securities industry in 1992. Brothers has been registered as a Broker with Maxim Group LLC since 2009.
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.