Securities Lawyers Blog
According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Maria Alvarez (Alvarez), previously associated with Ameriprise Financial Services, LLC, has at least 2 disclosable events. These events include 2 customer complaints, alleging that Alvarez 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 $1,450,000.00 on July 30, 2020.
Claimant alleges that on or about April 2018 his IPI advisor solicited and recommended an outside investment of $500,000 in diesel. Claimant alleges that he has not been repaid the $500,000 nor received any earnings. In addition, he alleges that he incurred tax liabilities of at least $200,000 because of the withdrawal of the investment amount. Claimant’s causes of action are negligence; negligent supervision; negligent hiring/retention; breach of fiduciary duty, and joint venture/joint enterprise liability. The case was originally filed in state court and received on 4/8/20. Ameriprise received the statement of claim on 7/30/20. Claimant filed an Amended Statement of Claim on 10/13/20 in which he expanded his claim to include allegations that the variable annuity he purchased in 2015 was unsuitable. He requests damages of $1,450,000 plus interest, exemplary damages, costs and fees.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $1,450,000.00 on July 30, 2020.
Claimant alleges that on or about April 2018 his IPI advisor solicited and recommended an outside investment of $500,000 in diesel. Claimant alleges that he has not been repaid the $500,000 nor received any earnings. In addition, he alleges that he incurred tax liabilities of at least $200,000 because of the withdrawal of the investment amount. Claimant’s causes of action are negligence; negligent supervision; negligent hiring/retention; breach of fiduciary duty, and joint venture/joint enterprise liability. The case was originally filed in state court and received on 4/8/20. Ameriprise received the statement of claim on 7/30/20. Claimant filed an Amended Statement of Claim on 10/13/20 in which he expanded his claim to include allegations that the variable annuity he purchased in 2015 was unsuitable. He requests damages of $1,450,000 plus interest, exemplary damages, costs and fees.
Financial Advisors providing advice to retail investors are required to adhere to the SEC’s Regulation Best Interest (Reg BI). Reg BI applies a ‘best interest’ standard for broker-dealers and their associated people. 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. 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.
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. 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. Reg BI comes with different key obligations that associated persons must meet in dispensing advice. The care obligation requires registered representatives to carefully evaluate investment options, review the risks and rewards of the investment or service, compare similar products, and ensure that the recommended investment is appropriate for the customer and in the retail investor’s best interest.
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. 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.
Alvarez has been in the securities industry for more than 19 years. Alvarez has been registered as a Broker with Ameriprise 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.