Securities Lawyers Blog
According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Wendell Trapp (Trapp), previously associated with San Blas Securities LLC, has at least 8 disclosable events. These events include 8 customer complaints, alleging that Trapp 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 $638,052.00 on September 30, 2024.
Attorney for client alleges the financial advisor was supposed to invest client’s funds in a municipal bond earning 4.65%, but financial advisor made numerous unauthorized purchases and sent funds from client account to unknown parties. Client requests compensation related to Financial Advisor conduct.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $30,000.00 on May 29, 2024.
The client alleges the financial advisor stated the investment would not lose principal which was not accurate.
FINRA BrokerCheck shows a settled customer complaint on April 04, 2024.
The client alleges that the financial advisor lied to him about his investments and that he would not lose any money.
FINRA BrokerCheck shows a settled customer complaint on March 25, 2024.
The client alleges the financial advisor gave erroneous information about an investment.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $6,000.00 on March 21, 2024.
Clients allege the financial advisor did not properly explain the municipal bond fund purchased in their account as they believed the fund paid a specific rate of interest and had a yearly maturity date. Clients also allege the financial advisor did not follow their instructions to liquidate the bond fund.
FINRA BrokerCheck shows a settled customer complaint on March 18, 2024.
The client alleges he did not authorize the transfer of Energy Transfer stock or $63,500 cash to other accounts.
FINRA BrokerCheck shows a settled customer complaint on March 15, 2024.
The client alleges the financial advisor stated he was in a no risk investment when, in fact, his principal was not protected.
FINRA BrokerCheck shows a settled customer complaint on March 07, 2024.
Client alleges she purchased a bond with her former financial advisor that guaranteed her principal with an expected growth of 5% annually each year.
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.
In addition to specific investments being recommended, under Reg BI, a broker must also understand the type of account that their client would need in order to meet their care obligations. The SEC has stated that the type of securities account an investor has can greatly affect a customers’ costs and overall investment returns. Further, different account types can offer and support different features, products, securities, or services, and account type would not be appropriately applied in a one size fits all manner.
Trapp has been in the securities industry for more than 7 years. Trapp has been registered as a Broker with San Blas Securities LLC since 2024.
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.