Securities Lawyers Blog
According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Santiago Torres (Torres), previously associated with Truist Investment Services, Inc., has at least 3 disclosable events. These events include 2 customer complaints, one tax lien, alleging that Torres recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a pending customer complaint on January 31, 2025.
Torres was named a respondent in a FINRA complaint alleging that he failed to provide information and documents and failed to appear for on-the-record testimony requested by FINRA as part of an investigation into whether he misappropriated funds and falsified customer documents. The complaint alleges that FINRA opened the investigation after reviewing a Form U4 amendment filed by Torres’ member firm that disclosed a customer complaint alleging that he misappropriated funds from the customer, who was Torres’s wife’s cousin, and other family members. The requested information and documents were relevant to determining whether Torres misappropriated funds from customers and other family members or forged customer documents, and they were necessary for FINRA to complete its investigation. Torres’ testimony was also material to FINRA’s investigation.
FINRA BrokerCheck shows a pending customer complaint on August 13, 2024.
Client alleges representative misappropriated funds from 10/2018 to 9/2024.
FINRA BrokerCheck shows a pending customer complaint on August 05, 2024.
Client alleges representative misappropriated various family member’s funds.
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. Thus, without conducting its own reasonable investigation, a brokerage firm cannot depend solely on the issuer for information about a company.
Another protective measure is to require broker discloses. FINRA requires the broker to disclosure events such as customer complaints, IRS tax liens, judgments, investigations, terminations, and even criminal matters on their public BrokerCheck reports. FINRA has acknowledged that recent studies provide evidence of the predictability of future regulatory and customer complaint issues for brokers with a history of such events. 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.
Torres has been in the securities industry for more than 14 years. Torres has been registered as a Broker with Truist Investment Services, Inc. since 2021.
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.