Securities Lawyers Blog
According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Todd Anderson (Anderson), previously associated with Benchmark Investments, LLC, has at least 4 disclosable events. These events include one customer complaint, 3 regulatory events, alleging that Anderson recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a final customer complaint on June 17, 2024.
The Commission denied Mr. Anderson’s IAR application because the permanent bar imposed by FINRA upon Mr. Anderson constitutes an order of an SRO revoking his registration as a broker in securities for at least 6 months within the meaning of A.R.S. \\u00a7 44-3201(A)(10) and denial of Mr. Anderson’s IAR application is in the public interest within the meaning of A.R.S. \\u00a7 44-3201(A).
FINRA BrokerCheck shows a final customer complaint on December 20, 2023.
Without admitting or denying the findings, Anderson consented to the sanction and to the entry of findings that he refused to provide documents and information requested by FINRA in connection to its investigation of an amended Form U5 submitted by his member firm. The findings stated that Anderson’s firm filed an amended Form U5 disclosing that the firm had initiated an internal review after Anderson’s client disputed a signature on a fixed annuity application.
FINRA BrokerCheck shows a final customer complaint on April 20, 2023.
Without admitting or denying the findings, Anderson consented to the sanctions and to the entry of findings that he recommended that a senior customer purchase over $1 million in mutual funds across 31 fund families, without considering the availability of fee discounts that would have been available to the customer by investing in fewer fund families. The findings stated that in making recommendations to the customer, Anderson failed to consider that the customer could have received a fee discount by reaching higher breakpoint levels, including through rights of accumulation, had the customer purchased funds in fewer fund families. Anderson’s recommendation that the customer invest in multiple fund families, without regard for available rights of accumulation and breakpoint discounts, caused the customer to incur $20,867 in unnecessary sales charges.
FINRA BrokerCheck shows a settled customer complaint on July 30, 2020.
Customer alleges unsuitable investment recommendations made between 2010-2013 and other causes of action.
Financial Advisors providing advice to retail investors are required to adhere to the SEC’s Regulation Best Interest (Reg BI). Reg BI applies a ‘best interest’ standard for broker-dealers and their associated people. 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.
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. The SEC has stated that Reg BI is drawn from fiduciary principles that are common to both brokers and investment advisors including an obligation to act in the investor’s best interest and prohibiting an advisor from placing their own interests ahead of the investor’s. 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 financial advisor must use their knowledge of both their reasonable diligence into investment options as well as their knowledge of the investor’s client specific needs to consider reasonably available investment options. Those investment options must allow the broker to determine that there is a reasonable basis that the recommendation is in the retail investor’s best interest. An advisor must understand the type of account, securities, and their client in order to meet their care obligations. The type of securities account has the potential to greatly affect retail customers’ costs and investment returns. Different types of securities accounts can offer different features, products, or services, and not all types of accounts or services would be in every investor’s best interest.
Anderson has been in the securities industry for more than 34 years. Anderson has been registered as a Broker with Benchmark Investments, LLC 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.