The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that financial advisor James Crosson (Crosson), currently employed by Lincoln Financial Securities Corporation (Lincoln Financial) and formerly with Voya Financial Asvisors, Inc. (Voya Financial) has been subject to at least four customer complaints, and one termination for cause. According to records kept by The Financial Industry Regulatory Authority (FINRA), Crosson’s customer complaints alleges that Crosson recommended unsuitable investments in a stock called Castle Brands (Ticker Symbol: ROX) among other allegations of misconduct relating to the handling of their accounts.
Castle Brands purports to be a developer and international marketer of premium and super premium beverage alcohol brands including rum, whiskey/bourbon, liqueurs, vodka and tequila, which are marketed and sold in the United States, Canada, Europe, Latin America and Asia. The stock appears to be a risky penny stock with a market capitalization of little more than $200 million.
In July 2019 a customer complained that Crosson violated the securities laws by alleging that the risks associated with purchasing Castle Brands stock was misrepresented and the amount invested in the stock was excessive. The claim alleges $85,000 in damages and settled for $11,196.
In July 2019 a customer complained that Crosson violated the securities laws by alleging that the risks associated with purchasing Castle Brands stock was misrepresented. The claim alleges $39,703 in damages and is currently pending.
In April 2019 Crosson was discharged from Voya Financial after the firm alleged that Crosson discussed one customer’s complaint with another customer.
Brokers are required under the securities laws to treat their clients fairly. This obligation includes the duties to disclose material risks of the investments they recommend and to present products, particularly complex or confusing products, in a fair and balanced manner that allows the client to evaluate the recommendation. Another important obligation advisors have is to make only suitable recommendations for investments to the client. There are many investments that are not appropriate for the majority of investors or for certain investors given their risk tolerance, age, and other factors. Advisors should not present these investment options to clients. There are two screens that advisors must employ to determine whether an investment is suitable for a client. First, there must be a reasonable basis for the recommendation – meaning that the product has been investigated and due diligence conducted into the investment’s features, benefits, risks, and other relevant factors. The advisor must conclude that the investment is suitable for at least some investors and some securities may be suitable for no one. Second, the broker then must match the investment as being appropriate for the customer’s specific investment needs and objectives such as the client’s retirement status, long or short term goals, age, disability, income needs, or any other relevant factor.
According to newsources, a study revealed that 7.3% of financial advisors had a customer complaint on their record when records from 2005 to 2015 were examined. Brokers must publicly disclose reportable events on their BrokerCheck reports that include customer complaints, IRS tax liens, judgments, investigations, terminations, and criminal cases. In addition, research has show a disturbing pattern with troublesome brokers where brokers with high numbers of customer complaints are not kicked out of the industry but instead these brokers are sifted to lower quality brokerage firms with loose hiring practices and higher rates of customer complaints. These lower quality firms may average brokers with five times as many complaints as the industry average.
Crosson entered the securities industry in 1984. From September 2009 until March 2015 Crosson was registered with Investors Capital Corp. From March 2015 until April 2019 Crosson was associated with Voya Financial. Finally, since May 2019 Crosson has been registered with Lincoln Financial out of the firm’s Middletown, Rhode Island office location.
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.