Securities Lawyers Blog
According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Christopher Jumalon (Jumalon), previously associated with Navy Federal Investment Services, LLC, has at least 2 disclosable events. These events include 2 customer complaints, alleging that Jumalon 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 $11,100.00 on January 25, 2024.
[REDACTED] met with Chris Jumalon, Financial Advisor, on 04/18/2023. His goal was to move 300K into 3 investment strategies. 100K to managed account, 100K to 5-year Fixed Annuity(FA) with Brighthouse and 100K to 3 year FA with Brighthouse. Mr. Jumalon followed through on establishing the 100K managed account but failed to process paperwork for both annuity contracts. The failure to process the paperwork was identified on 1/25/2024. [REDACTED] decided to move forward with the 100K Brighthouse 5 year FA, and paperwork was submitted on 10/16/2023. [REDACTED] decided he did not want to invest the remaining 100K to the second Brighthouse FA and requested funds be moved to Navy Federal Investment Services (NFIS) Digital investor. NFIS waived the trading fee for [REDACTED]. [REDACTED] was compensated $11,110 for the time period the funds were not invested and loss of interest earned.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $48,376.00 on January 04, 2024.
Advisor, Chris Jumalon assisted [REDACTED] to purchase a $1M American National annuity. When Chris completed the direct company application. He failed to complete the required suitability section of the application. Chris was contacted by Ash Brokerage regarding the issue and was advised this needed to be completed for the policy to be established. Chris failed to follow through on this request and failed to scan the application into the system of record. January 4, 2024 [REDACTED] contacted Chris as he received his check back for the annuity. [REDACTED] requested that he be reimbursed for lost interest. Account activity was reviewed by Navy Federal Investment Services Compliance and in February 2024 Navy Federal Investment Services agreed to reimburse and a release of claims was sent, and he was to be reimbursed $34,168. However, [REDACTED] declined the initial release of claims amount because he felt he was owed more due to Chris also failing to invest money in his brokerage account to purchase Treasury Bills. Account activity was again reviewed by Navy Federal Investment Services Compliance and in July 2024 Navy Federal Investment Services agreed to reimburse and a release of claims was completed, and he was reimbursed 48,376.00.
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 advisor must use their knowledge of the first two elements to consider reasonably available investment option alternatives and come to the conclusion that there is a reasonable basis to believe that the recommendation or advice being provided 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.
Jumalon has been in the securities industry for more than 8 years. Jumalon has been registered as a Broker with Navy Federal Investment Services, LLC 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.