Securities Lawyers Blog
According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Urbin Mckeever (Mckeever), previously associated with Frost Brokerage Services, INC., has at least one disclosable event. These events include one customer complaint, alleging that Mckeever recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a pending customer complaint with a damage request of $9,950,000.00 on October 19, 2023.
On October 19, 2023, Urbin McKeever (‘McKeever’), was named as third-party defendant in a civil action in the 96th Judicial District Court of Tarrant County, Texas, Cause No. 096-340969-23. This civil action stems from a dispute as to the ownership of an account at Frost Brokerage Services, Inc. (‘FBS’) (the ‘Account’). FBS placed a hold on the Account after conflicting claims of ownership were raised. The lawsuit was originally filed on March 16, 2023, by one of the purported owners of the Account (‘Purported Owner 1’), seeking declaratory relief as to Account’s proper ownership. The complaint was subsequently amended, alleging claims of conversion and theft by the other purported owners of the Account (‘Purported Owner 2’), as well as claims against FBS for wrongfully freezing the account and conspiring with the other defendants to accomplish their alleged conversion/theft. On October 19, 2023, Purported Owner 2 filed its own complaint, making similar allegations of theft against the Purported Owner 1 (the ‘October Complaint’). The October Complaint also alleges that FBS and other Frost-affiliated parties, including McKeever, aided and abetted the alleged theft and fraudulent acts of Purported Owner 1 and breached his fiduciary duties to Purported Owner 2. The case is currently stayed pending a determination of whether the case will be compelled to FINRA arbitration. The Frost-affiliated parties plan to file responses to the complaint allegations if and when the stay is lifted and such responsive pleadings are required of them by the court.
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 Reg BI standard of care applies to registered representatives making recommendations to customers in the purchase, sale, or exchange of securities or the implementation of investment strategies involving securities and non-securities. The rule also applies to the handling of opening accounts such as account transfers and types of accounts being recommended to be opened. Reg BI is drawn from fiduciary principles that include an obligation to act in the retail investor’s best interest and the broker is prohibited from placing their own interests ahead of the investor’s interest.
There are several different aspects of the rule that brokers must comply with. One of which is the care obligations which requires brokers to form a reasonable belief that their investment advice and recommendations are in the retail investor’s best interest. The care obligations includes 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. Finally, the financial advisor must use their knowledge of both their reasonable diligence into investment options as well as their knowledge of the investor’s client specific needs to consider reasonably available investment options. Those investment options must allow the broker to determine that there is a reasonable basis that the recommendation is in the retail investor’s best interest.
An advisor must understand the type of account, securities, and their client in order to meet their care obligations. The type of securities account has the potential to greatly affect retail customers’ costs and investment returns. Different types of securities accounts can offer different features, products, or services, and not all types of accounts or services would be in every investor’s best interest.
Mckeever has been in the securities industry for more than 28 years. Mckeever has been registered as a Broker with Frost Brokerage Services, INC. since 1998.
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.