Securities Lawyers Blog
According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker James Minich (Minich), previously associated with Purshe Kaplan Sterling Investments, has at least one disclosable event. These events include one customer complaint, alleging that Minich 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 $100,000.00 on November 24, 2023.
On November 1, 2023 Clients’ son filed a complaint with the NY Attorney General’s Office which Complaint was subseqently re-filed with the NY State Department of Financial Services on April 24, 2024. Clients allege that MinichMacGregor Wealth Management and Principal Jim Minich charged incorrect management fees from 1994-2023 greater than the stated rate of 1%. Clients also allege misleading and misrepresentation of their financial affairs and assert that the brokerage account summaries had performance metrics removed and investment results over any period removed from annual and monthly reports. Clients also allege mismanagement and abandonment of accounts. Clients allege that James Minich started a new annuity in 2004 and then ceased trading in the account in 2015, and removed themselves as advisor in 2017 and the annuity has not had a financial advisor managing the investments for the last 9 years, and was placed as a house account for the last 7 years, despite being listed by MinichMacGregor as one of the accounts they manage. Clients also allege a violation of fiduciary duty and asserted that Jim Minich recommended an annuity for clients when they were 80 years old and assert that the fees associated with new annuities make it an irresponsible choice for 80-year-olds.
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 standard applies when a registered representative is providing investment advice through making recommendations customers and covers securities transaction, investment strategies, and recommendations concerning advice on opening of an account or accounts. 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. The associated person must then apply both their reasonable diligence into various investment options as well as the information gathered as to the investor’s specific needs when considering the investment recommendation. The broker must explore various alternative investment options available to address these needs and determine that there is a reasonable basis to believe that the recommendation or service being recommended is in the retail investor’s best interest.
Finally, an advisor must also analyze the specific account features offered and determine whether their client can benefit from them in order to meet their care obligations. While securities and investments come with costs that must be considered, the type of securities account also has changes the cost equation for the investor and can change the retail customers’ future investment returns. The associated person must consider the different types of securities accounts for their client and determine whether or not the cost or features are reasonably needed for the client or if the customer’s current account costs and features are superior to solutions available to the advisor. In any event, the type of account and services recommended must be in the investor’s best interest.
Minich has been in the securities industry for more than 35 years. Minich has been registered as a Broker with Purshe Kaplan Sterling Investments since 2009.
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.