Securities Lawyers Blog
According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Jason Poff (Poff), previously associated with Allstate Financial Services, LLC, has at least 3 disclosable events. These events include one customer complaint, 2 regulatory events, alleging that Poff recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a settled customer complaint on April 05, 2021.
Customer alleged that investment of $20,000 in REIT in June 2014 was unsuitable. Complaint was settled to avoid the time and expense of further dispute. Activity Dates: 6/20/14 TO 4/5/21.
FINRA BrokerCheck shows a final customer complaint on December 23, 2020.
The RR was named as a respondent in a FINRA complaint alleging he engaged in undisclosed and unapproved OBAs through a business that he owned and operated
FINRA BrokerCheck shows a final customer complaint on December 23, 2020.
Poff was named a respondent in a FINRA complaint alleging he engaged in undisclosed and unapproved OBAs through a business that he owned and operated. The complaint alleges that Poff, through a company he solely owned, engaged in business activities for two outside entities. Poff never provided the firm with written notice of his or his company’s business activities for the entities and did not receive approval to engage in any business activities for the entities. Poff’s contacts at the entities told him that they wanted his help with their lending program. Specifically, they wanted Poff to communicate with potential borrowers and gather their data and information for loan documents. Poff began to gather potential borrowers’ information through his company for the entities in preparation for obtaining loans. Poff, holding himself out as president of his company, drafted consulting contracts for potential borrowers, at least eight of which were executed by the potential borrowers. Pursuant to the consulting contracts, Poff’s company was to facilitate cashier’s check processing and transfer of received funds to the accounts as directed by the potential borrower. Certain of these potential borrowers also signed powers of attorney granting Poff’s company authority to process a cashier’s check that the entities would issue, and then direct funds received from the entities to the potential borrower’s account. Along with the consulting contracts and powers of attorney for potential borrowers, Poff’s company retained in its files copies of documents described as cashier’s checks that the entities issued to those potential borrowers for amounts ranging from $150,000 to $1 billion. Poff marketed the entities’ product to at least one firm customer. Poff pitched an entity loan to his firm’s customer, who was a senior citizen at that time. The customer signed a consulting contract and limited powers of attorney relating to the loan program. Poff expected to receive compensation for his work, through his company, for the entities. In fact, Poff hoped to be paid enough from his business with the entities to leave the firm completely. Poff also engaged in business activity for another entity outside the scope of his employment with the firm. Poff never provided the firm with written notice of his or his company’s business activities with this entity and did not receive approval for this business activity. The entity’s owner, who was setting up a family investment office, was interested in buying and selling fixed income products. Poff opened an account for the entity at the firm, but was told that the firm did not deal in the debt securities the entity’s owner wished to trade. Poff signed and had notarized an independent contractor/consultant agreement with the entity. The contract stated that Poff, through his company, would be paid $50,000 per month to provide to the entity professional services in the area of senior vice president as directed, needed and required. Poff assisted the entity and its owner in several bond transactions. For example, Poff wrote to a potential counterparty regarding the entity’s interest in depositing a real estate mortgage investment conduit with the potential counterparty’s institution in order to obtain a $50 million line of credit. Poff also communicated with the entity’s owner and a potential counterparty about the entity’s interest in selling a ?1.5 billion medium-term note. Additionally, Poff wrote a letter on behalf of the entity to a potential counterparty regarding the transfer of a restricted debt security issued by an energy company in Alaska to the entity. The complaint also alleges that Poff falsely attested to the firm on annual firm compliance questionnaires that he had disclosed all OBAs to the firm and that he was not engaging in any activity for OBAs that were not approved.
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. The SEC has stated that Reg BI is drawn from fiduciary principles that are common to both brokers and investment advisors including an obligation to act in the investor’s best interest and prohibiting an advisor from placing their own interests ahead of the investor’s. There are several different aspects of the rule that brokers must comply with. One of which is the care obligations which require brokers to form a reasonable belief that their investment advice and recommendations are in the retail investor’s best interest. The care obligations include 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. Using the foregoing information, the associated person then must consider reasonably available investment option to accomplish the investor’s goals as well as alternative investment options that may be cheaper or other important qualities. Finally, the advisor must conclude that there is a reasonable basis to believe that the recommendation being provided is in the 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.
Poff has been in the securities industry for more than 20 years. Poff has been registered as a Broker with Allstate Financial Services, LLC since 2018.
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.