Articles Tagged with advisor loans

shutterstock_93851422-300x240The investment fraud attorneys at Gana Weinstein LLP have currently been investigating previously registered broker John Blakezuniga (Blakezuniga). According to BrokerCheck Records kept by the Financial Industry Regulatory Authority (FINRA), Blakezuniga, has three regulatory disclosures on his profile.

In 2017, Blakezuniga allegedly violated his firm’s policy when he borrowed $775,000 from two of his firm’s customers and did not repay the full principal amount for either of these loans. According to FINRA, it is generally prohibited for an investment advisor to borrow money from a client unless certain conditions are met, which did not occur here. The purpose of this rule is to avoid serious potential conflicts of interest and risks associated with an investment adviser, who is a fiduciary, borrowing his or her client’s money. Furthermore, Blakezuniga was allegedly untruthful when he completed his firm’s annual compliance questionnaire and answered no to a question that asked if he ever borrowed money from a customer which was false.

Also in 2017, Blakezuniga was fined and suspended for 22 months when he recommended approximately 1,280 transactions in inverse and inverse leveraged exchange traded funds (non-traditional ETFs) in 85 customer accounts without a reasonable basis for the recommendations. In fact, Blakezuniga recommended that his customers hold these non-traditional ETF’s for periods ranging from 30 days to several years despite the fact that these investments were not meant to be held for long periods of time. According to FINRA, an investment adviser is always required to have a reasonable basis for making investment recommendations to clients. This is known as the “suitability” standard, which requires a recommendation based on a client’s idiosyncratic profile such as their individual financial situation, investment objectives, risk tolerance, and other factors.

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