Securities Lawyers Blog
According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker James Walesa (Walesa), previously associated with Arkadios Capital, has at least 2 disclosable events. These events include one customer complaint, one regulatory event, alleging that Walesa 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 $5,000,000.00 on August 11, 2025.
Unsuitable recommendations from 2016 to present
FINRA BrokerCheck shows a pending customer complaint on August 08, 2025.
Walesa was named a respondent in a FINRA complaint alleging that he failed to produce documents and information requested by FINRA as part of its investigation into the circumstances surrounding allegations made in a Statement of Claim against Walesa and his member firm, including whether Walesa committed sales practice violations and participated in undisclosed private securities transactions while he was registered with the firm. The complaint alleges that the Statement of Claim alleged, among other things, that three weeks before a senior customer passed away, Walesa recommended that the customer, through a Customer Family Trust, invest $200,000 in a highly speculative, private placement in a company that sold senior care products and offered residential care and adult daily care services. The Statement of Claim further alleged that after the customer’s passing, her daughter became the successor trustee of the Trust, and Walesa later recommended that the daughter invest another $100,000 from the Trust into the same private placement. The Statement of Claim also alleged that the total investment had become worthless. Walesa had disclosed his involvement with the company as an OBA in the Central Registration Depository (CRD). In his CRD disclosure, Walesa represented that his role as the chairman of the company, which he described as a healthcare and wellness company, was not investment related. The complaint also alleges that Walesa failed to appear for and provide on-the-record testimony requested by FINRA in connection with its investigation on two occasions. As a result, FINRA was unable to obtain his testimony regarding, among other things, his activities with the company, his recommendations to the customer, her daughter, and other customers, and his activities with respect to other investments.
When your financial advisor is providing advice they must adhere to the SEC’s Regulation Best Interest (Reg BI) rule and standard of care. Reg BI replaced the former “suitability” rule and created a ‘best interest’ standard for brokerage firms and registered representatives. This standard applies when brokers make recommendations to retail customer for any securities transaction or investment strategy involving securities, including recommendations of types of accounts. Reg BI applies when brokers recommend a retail investor engage in securities transaction or an investment strategy involving one or more securities. Reg BI also applies to financial advice concerning the transfer of funds and opening of accounts.
The care obligation also requires the broker to address the client’s specific needs through obtaining specific investment profile information on the client. The associated person typically will ask the customer for information such as the investor’s risk tolerance or ability to withstand account value declines or increases; experience with investments available; investment objectives and goals; investment time horizon; liquidity needs; assets such as investment accounts held at other financial institutions; tax information; their age and retirement plans; and other information that a customer may want to provide to the advisor to help them to properly address the services needed. The Reg BI rule applies a fiduciary principles and requires an associated person to act in the retail investor’s “best interests” while barring the broker from placing their own financial interests and compensation incentives ahead of the investor’s best interest. There are several different aspects of the rule that brokers must comply with. One of which is the care obligations which require brokers to form a reasonable belief that their investment advice and recommendations are in the retail investor’s best interest. The care obligations include 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.
Another aspect of the care obligation is focusing on the client’s specific needs which brokers must reasonably understand through obtaining information for the client’s investment profile. In completing a customer’s investment profile the advisor should include information such as the investor’s investment time horizon; liquidity needs; risk tolerance; experience with various investment vehicles; investment objectives and financial goals; assets and debts including outside investment accounts; marital status; tax information; age; and other relevant information that may be individual to the investor that the advisor would need to know to properly render advice or provide services. Finally, the advisor must use their knowledge of the first two elements to consider reasonably available investment option alternatives and come to the conclusion that there is a reasonable basis to believe that the recommendation or advice being provided 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.
Walesa has been in the securities industry for more than 39 years. Walesa has been registered as a Broker with Arkadios Capital since 2019.
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.