Securities Lawyers Blog
According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker George Conner (Conner), previously associated with Potomac Capital Markets, LLC, has at least one disclosable event. These events include one regulatory event, alleging that Conner recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a final customer complaint on August 02, 2024.
On December 31, 2023, Respondents failed to renew its registration but continued to act as an investment adviser and investment adviser representative, collecting advisory management fees during the unregistered periods. Prior to December 31, 2023, around August 16, 2023, the TSSB conducted an inspection of Respondents’ business and also identified multiple books and records deficiencies. Following the inspection, this matter was referred to the TSSB’s Legal Division around January 2024 and the Legal Division made multiple attempts to get in contact with the Respondents. As a result of being unable to contact the Respondents while the Respondents continued to act as an investment adviser and investment adviser representative while being unregistered, the TSSB filed a case with SOAH requesting relief that the Respondents cease and desist. At the hearing, Respondents failed to appear and the TSSB moved for a default dismissal deeming the factual allegations detailed in the notice of hearing are admitted, which was granted on July 17, 2024.\<char_lb_r>\, \<char_lb_r>\, Pursuant to \\u00a7155.501(d)(1) of the SOAH Rules of Procedure, the matters set forth and alleged by Counsel in the Notice are deemed admitted as true with respect to the Respondents. Pursuant to \\u00a7155.501(d)(1) of the SOAH Rules of Procedure and Section 4007.102 of the Texas Securities Act, the relief requested in the Notice with respect to the Respondents is granted. \<char_lb_r>\, \<char_lb_r>\, It is therefore ORDERED that the Conner Management Group, LLC and George Mathis Conner CEASE AND DESIST from acting as an investment adviser and investment adviser representative, respectively, in the State of Texas without first satisfying the registration requirements of the Texas Securities Act and Board\<char_lb_r>\, Rules.
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. 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. 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.
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.
Conner has been in the securities industry for more than 1 year. Conner has been registered as a Broker with Potomac Capital Markets, LLC since 2012.
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.