Securities Lawyers Blog
The investment attorneys of Gana Weinstein LLP are interested in speaking with clients of broker Parks Heard Brown Jr. (Brown). According to his BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA), Brown has been the subject of at least four customer complaints. The customer complaints against Brown allege securities law violations that claim unsuitable investments, churning, unauthorized trading, breach of fiduciary duty, and negligence among other claims.
The most recent complaint was filed in October 2016, alleging that the broker while employed at VSR Financial Services Inc. made unsuitable investments based on the client’s liquidity needs. In March 2014, FINRA found that Brown violated FINRA rules 2090 and 2111 that require the use of reasonable diligence when recommending investment strategies. In addition, a customer alleged an unsuitable series of investments made in account between June 2012 and January 2014 resulting in damages of $245,750.00. The case settled for $71,500.00.
In another case filed in March 2004 a customer alleged that in June 2003 Brown misrepresented and failed to inform the account activity that caused $7,000.00
in damages. The claim was resolved for $4,000.00.
Brown entered the securities industry in 1987. From October 2005 until July 2016, Brown was associated with VSR Financial Services Inc. out of the firm’s Marietta, Georgia office location. Broker Parks Heard Brown Jr.is currently not registered with any firm.
All advisers have a fundamental responsibility to deal fairly with investors including making suitable investment recommendations. In order to make suitable recommendations the broker must have a reasonable basis for recommending the product or security based upon the broker’s investigation of the investments properties including its benefits, risks, tax consequences, and other relevant factors. In addition, the broker must also understand the customer’s specific investment objectives to determine whether or not the specific product or security being recommended is appropriate for the customer based upon their needs.
When brokers engage in excessive trading, sometimes referred to as churning, the broker will typical trade in and out of securities, sometimes even the same stock, many times over a short period of time. Often times the account will completely “turnover” every month with different securities. This type of investment trading activity in the client’s account serves no reasonable purpose for the investor and is engaged in only to profit the broker through the generation of commissions created by the trades.
Churning is considered a species of securities fraud. The elements of the claim are:
• Excessive transactions of securities
• Broker control over the account
• Intent to defraud the investor by obtaining unlawful commissions
Gana Weinstein LLP represents investors who have suffered investment losses due to broker wrongdoing, such as unsuitable investments and churning. The majority of these claims may be brought in securities arbitration before FINRA. Our consultations are free of charge and the firm is only compensated if you recover.