Securities Lawyers Blog
According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Daniel Mackle (Mackle), previously associated with Md Global Partners, LLC, has at least one disclosable event. These events include one regulatory event, alleging that Mackle recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a final customer complaint on March 03, 2023.
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 pursuant to Sections 15(b) and 21C of the Securities Exchange Act of 1934 (‘Exchange Act’) against Silver Edge Financial LLC (‘Silver Edge’) and additionally pursuant to Section 203(f) of the Investment Advisers Act of 1940 (the ‘Advisers Act’) against Daniel J. Mackle, Sr. (‘Mackle’). The Commission finds that this proceeding arises out of Respondents’ sale of membership interests in two pooled investment vehicles – the Silver Edge Pre-IPO Fund LLC and the Silver Edge Venture Fund LLC (the ‘Silver Edge Funds’) – that were formed to invest in pre-IPO securities. Since January 2019, Silver Edge and its CEO, Daniel Mackle, procured interests in a portfolio of pre-IPO shares which they offered to investors as membership interests in the Silver Edge Funds. Silver Edge is the Manager of the Silver Edge Funds and Mackle was the sole member of Silver Edge. During the relevant period, Silver Edge and Mackle sold over $65 million worth of interests in the Silver Edge Funds to investors with the assistance of a sales force of unregistered brokers. Respondents marketed and sold series interests in the Silver Edge Funds nationwide and were paid management fees as a percentage of the amounts sold. In so doing, Respondents operated as unregistered brokers, in willful violation of Section 15(a) of the Exchange Act.
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 a registered representative is providing investment advice through making recommendations customers and covers securities transaction, investment strategies, and recommendations concerning advice on opening of an account or accounts. 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.
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 core obligations that brokers must comply with. There is the duty of care obligation requiring financial advisors to form a reasonable belief that their investment advice and recommendations are in the retail investor’s best interest among other duties. In order to do that the broker must evaluate the potential risks, rewards, and costs associated with a product, account type, or series of transactions being recommended.
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 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. 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.
Mackle has been in the securities industry for more than 27 years. Mackle has been registered as a Broker with Md Global Partners, 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.