Securities Lawyers Blog
According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Jaime Westenbarger (Westenbarger), previously associated with Securities America, INC., has at least 5 disclosable events. These events include 3 customer complaints, 2 regulatory events, alleging that Westenbarger 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 $26,000.00 on July 20, 2021.
Claimant alleges their registered representative recommended unsuitable alternative investments.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $75,000.00 on May 28, 2021.
Claimants allege former registered representative recommended unsuitable investments.
FINRA BrokerCheck shows a final customer complaint on April 19, 2021.
The Securities and Exchange Commission (‘Commission’) deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted pursuant to Section 15(b) of the Securities Exchange Act of 1934 (‘Exchange Act’) and Section 203(f) of the Investment Advisers Act of 1940 (‘Advisers Act’) against Jaime M. Westenbarger (‘Respondent’ or ‘Westenbarger’). The Commission finds that Westenbarger was a registered representative and investment adviser representative associated with several SEC-registered broker-dealers and investment advisers, respectively, from March 2003 until August 14, 2019. Westenbarger, 43 years old, is currently a resident of Brentwood, Tennessee. On June 24, 2020, the Administrator of the Corporations, Securities & Commercial Licensing Bureau of the Michigan Department of Licensing and Regulatory Affairs, issued and entered a final Consent Order Resolving Notice and Order To Cease and Desist in the Matter of Jaime Westenbarger, CRD# 4625703, Respondent, Complaint 341500 (the ‘Michigan Order’). The Michigan Order, pursuant to Westenbarger’s consent, required, among other things, that Westenbarger cease and desist from violating the Michigan Securities Act, and prohibited him from conducting any business in Michigan regulated by the Michigan Securities Act or acting as a principal or consultant on behalf of an entity so engaged in that business. The Michigan Order found that when Westenbarger was a registered representative and an investment adviser representative of a registered broker-dealer and a registered investment adviser, respectively, he offered two investors from Michigan an investment in a ‘corporate note’ for $200,000 and that he accepted a check from these two investors in that amount to be invested in the corporate note. The Michigan Order also found that Westenbarger offered a ‘short term CD’ investment to another Michigan investor for $60,000 and that he accepted a check from that investor in that same amount to invest in the short term CD. The Michigan Order further found that, in each case, rather than investing the funds as represented, Westenbarger used the funds to pay for personal expenses. The Michigan Order concluded that Westenbarger’s conduct violated Section 501 of the Michigan Securities Act, MCL 451.2501, which prohibits untrue statements of material fact in connection with the offer or sale of securities.
FINRA BrokerCheck shows a settled customer complaint on March 09, 2021.
Claimant alleges unsuitability of alternative investments causing financial harm. The allegations also include violations of rules, negligence, misrepresentations and omissions of material facts, and breach of fiduciary duty.
FINRA BrokerCheck shows a final customer complaint on March 31, 2020.
Respondent Jaime Westenbarger, in connection with the offer and sale of securities, misstated a material fact in connection with the offer and sale of a security when he represented he would invest RM and SM’s funds in a corporate note, but instead used the funds to pay for personal expenses, contrary to section 501 of the Securities Act, MCL 451.2501. \<char_lb_r>\, \<char_lb_r>\, Respondent Jaime Westenbarger, in connection with the offer or sale of securities, misstated a material fact in connection with the offer or sale of a security when he represented to AW as power of attorney for LW that he would invest LW’s funds in a certificate of deposit, but instead used the funds to pay for personal expenses, contrary to section 501 of the Securities Act, MCL 451.2501.
In the financial industry advisors must meet the requirements of the SEC’s Regulation Best Interest (Reg BI) in providing investment advice and services. Reg BI established a ‘best interest’ standard for brokerage firms and registered representatives. 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.
The care obligation also requires the broker to address the client’s specific needs through obtaining specific investment profile information on the client. The associated person typically will ask the customer for information such as the investor’s risk tolerance or ability to withstand account value declines or increases; experience with investments available; investment objectives and goals; investment time horizon; liquidity needs; assets such as investment accounts held at other financial institutions; tax information; their age and retirement plans; and other information that a customer may want to provide to the advisor to help them to properly address the services needed. 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 different sub-parts of the Reg BI rule that financial professionals must comply with when providing advice. Among those is the duty of care obligation that mandates associated persons to evaluate investment options, review and be knowledgeable the risks and rewards of the investment or service, compare alternative investment products, and ensure that the overall investment strategy aligns with the client’s goals and is in their best interests.
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. 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. 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.
Westenbarger has been in the securities industry for more than 16 years. Westenbarger has been registered as a Broker with Securities America, INC. since 2016.
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.