According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker James Davis (Davis), previously associated with Northwestern Mutual Investment Services, LLC, has at least 4 disclosable events. These events include 4 customer complaints, alleging that Davis recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $25,949.00 on November 22, 2024.
Customer alleged that in or around december 2022, the representative misrepresented a variable life insurance policy as an investment and customer alleged that they did not need life insurance. Customer requested a refund of premiums paid.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $14,500.00 on August 19, 2024.
Customer alleges that in or around january 2023, the representative sold them a variable life insurance policy that did not align with the customer’s goals, and that the representative did not accurately explain the terms of the policy.
FINRA BrokerCheck shows a settled customer complaint on August 06, 2024.
Customer alleges that in or around august 2023, the representative misrepresented the terms of a variable life insurance policy and did not sufficiently explain applicable policy fees and the cost of insurance.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $43,072.00 on April 17, 2024.
Customer alleged representative misrepresented the terms of a variable life insurance policy and is requesting a refund of premiums paid.
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. The cost of the recommendation and information about the investor 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. So, rather than depending solely on the issuer for company information, a brokerage firm should conduct its own reasonable investigation.
Another protective measure is to require broker discloses. Brokers must publicly disclose reportable events on their BrokerCheck reports that include customer complaints, IRS tax liens, judgments, investigations, terminations, and even criminal matters. FINRA has recognized that recent research shows past regulatory and customer complaint issues can indicate future problems for brokers. 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.
Davis has been in the securities industry for more than 6 years. Davis has been registered as a Broker with Northwestern Mutual Investment Services, LLC since 2017.
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.