Securities Lawyers Blog
According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Mario Rivero (Rivero), previously associated with LPL Financial LLC, has at least 2 disclosable events. These events include 2 tax liens, alleging that Rivero recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a final customer complaint on January 31, 2025.
Respondent Rivero failed to comply with an arbitration award or settlement agreement or to satisfactorily respond to a FINRA request to provide information concerning the status of compliance.
FINRA BrokerCheck shows a final customer complaint on March 28, 2023.
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 Mario E. Rivero (‘Rivero’ or ‘Respondent’). The Commission finds that Rivero, age 39, was a registered representative and investment adviser representative of Wells Fargo Clearing Services, LLC from May 2010 until September 2020, and of LPL Financial, LLC from September 2020 to June 2021. Rivero held FINRA series 6, 7, 63 and 68 licenses before being barred by FINRA in June 2021. On February 2, 2023, Rivero pled guilty to violations of 18 U.S.C. § 1343, 18 U.S.C. § 2; 15 U.S.C. §§ 78j(b) & 78ff, and 17 C.F.R. § 240.10b-5 thereunder before the United States District Court for the District of New Jersey in United States v. Rivero, No. 22 Crim. 11085 (D.N.J.). Rivero has not yet been sentenced in that matter. On March 14, 2022, the Commission filed a complaint against Rivero in SEC v. Rivero, Civil Action No. 22-01360 (ZNQ-DEA), in the Federal District Court of the District of New Jersey. On March 6, 2023, the court entered an order permanently enjoining Rivero, by consent, from future violations of Sections 17(a)(1) and 17(a)(2) of the Securities Act of 1933; Section 10(b) of the Exchange Act and Rule 10b-5 thereunder; and Sections 206(1) and (2) of the Investment Advisers Act of 1940. The Commission’s complaint alleged that between at least July 2018 and November 2020, Rivero convinced at least five of his clients and customers to transfer funds from their accounts to entities with which Rivero was associated. Rivero falsely told his victims that the purpose of these fund transfers was so that he could make various investments on their behalf. However, Rivero misappropriated approximately $680,000 from the entities that received the investor funds which he never disclosed to his clients and customers.
Under the securities laws brokers are obligated to act in their clients’ best interests and provide only suitable recommendations for investments to the client. In addition, the SEC has promulgated ‘Regulation Best Interest (Reg BI)‘ which according to the SEC enhanced the broker-dealer standard of conduct beyond existing suitability obligations and requires broker-dealers to act in the best interest of a retail customer when making a recommendation of any securities transaction or investment strategy involving securities. Regulation Best Interest and the fiduciary standard for investment advisers are drawn from key fiduciary principles that include an obligation to act in the retail investor’s best interest and not to place their own interests ahead of the investor’s interest.
Brokers have an obligation to first obtain and evaluate sufficient information about a retail investor to form a reasonable basis to believe the account recommendations are in the retail investor’s best interest. Recommendations cannot be based on materially inaccurate or incomplete information. Every recommendation’s cost and investor details are always part of material information. Types of costs that must be considered including account fees, commissions and transaction costs, tax considerations, as well as indirect costs.
In addition to obligation to understand the customer the broker must also investigate the product being sold. FINRA firms have an obligation to conduct a reasonable investigation of the issuer and the securities they recommend in offerings. A brokerage firm has a special relationship with a customer from the fact that in recommending the security, the broker represents to the customer that a reasonable investigation has been made. Accordingly, a brokerage firm may not rely blindly upon the issuer for information concerning a company in lieu of conducting its own reasonable investigation.
Another protective measure for investors is the requirement for brokers to disclose. Brokers are required to reveal important events, such as customer complaints, IRS tax liens, judgments, investigations, terminations, and even criminal matters, publicly on their BrokerCheck reports. FINRA has recognized that recent studies offer evidence showing that brokers with a past history of regulatory and customer complaint issues are more likely to have such issues in the future. FINRA’s Office of the Chief Economist (OCE) published a study showing the predictability of disciplinary and disclosure events based on past similar events. The OCE study showed that past disclosure events, including regulatory actions, customer arbitrations and litigations of brokers, have significant power to predict future investor harm. The data shows that where a member firm on-boards brokers with a significant history of misconduct there is a high likelihood that the broker will continue to engage in similar behavior.
Rivero has been in the securities industry for more than 10 years. Rivero has been registered as a Broker with LPL Financial LLC since 2020.
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.