According to BrokerCheck records financial advisor Andrew Costa (Costa), currently employed by Madison Avenue Securities, LLC (Madison Securities) has been subject to five customer complaints. According to records kept by The Financial Industry Regulatory Authority (FINRA), most of a Costa’s customer complaints allege that Costa made unsuitable recommendations in real estate and note securities. Costa also discloses his business activities with Global Wealth Management, Costa Capital, Costa Marketing, and Global 1031 Exchange.
In June 2018 a customer made allegations that in 2016 that they purchased the product at issue through a different individual and not Costa. The claim alleged $696,500 in damages and is currently pending.
In May 2018 another customer made allegations similar allegations and the firm claims that Claimants have also alleged that respondents assisted in representing to the public that the non-associated individual was affiliated with respondents in an attempt to make respondents responsible for actions of a non-associated individual. The claim alleged $150,000 in damages and is currently pending.
Brokers have a responsibility treat investors fairly which includes obligations such as making only suitable investments for the client. In order to make a suitable recommendation the broker must meet certain requirements. First, there must be reasonable basis for the recommendation the product or security based upon the broker’s investigation and due diligence into the investment’s properties including its benefits, risks, tax consequences, and other relevant factors. Second, the broker then must match the investment as being appropriate for the customer’s specific investment needs and objectives such as the client’s retirement status, long or short term goals, age, disability, income needs, or any other relevant factor.
The number of complaints against Costa are unusual compared to his peers. According to newsources, only about 7.3% of financial advisors have any type of disclosure event on their records among brokers employed from 2005 to 2015. Brokers must publicly disclose reportable events on their CRD customer complaints, IRS tax liens, judgments, investigations, and even criminal matters. However, studies have found that there are fraud hotspots such as certain parts of California, New York or Florida, where the rates of disclosure can reach 18% or higher. Moreover, according to the New York Times, BrokerCheck may be becoming increasing inaccurate and understate broker misconduct as studies have shown that 96.9% of broker requests to clean their records of complaints are granted.
Costa entered the securities industry in 2004. From February 2010 until August 2017 Costa was registered with G.F. Investment Services, LLC. Since August 2017, Costa has been registered with Madison Securities out of the firm’s Fort Lauderdale, Florida office location.
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.