According to BrokerCheck records, in November 2017, the Financial Industry Regulative Authority (FINRA) suspended Gibbons for recommending unsuitable investments to 5 elderly customers and over-concentrating the accounts from 65% to 79% into a highly risky energy sector security. Gibbons recommendations were not appropriate for the customer in consideration of the customer’s age, risk tolerance, financial needs, and investment objectives. Without admitting or denying the findings, Gibbons consented to the sanctions and to the entry of findings. As a result of the violation, FINRA imposed a suspension of 18 months, a $20,000 fine and a restitution fee of $716,749.78 to remedy the customer losses.
In addition, Gibbons has also been subject to two pending customer disputes involving unsuitable investments in energy securities. In May 2018, a customer alleged that from 2012 to 2015, Gibbons was recommending unsuitable shares of energy stock to the customer.
In November 2015, a customer alleged that from May 2014, Gibbons placed the customer into investments that did not appropriately match the customer’s investment objectives and needs.
Our firm is currently tracking a number of brokers that severely concentrated their clients in a single sector which has historically possessed speculative risk. Financial advisors must ensure that the investments being recommended to their client is appropriate and suitable for the investor and conduct due diligence on the company before making the recommendation. Brokers must demonstrate due diligence by thoroughly researching the investment’s properties including its benefits, risks, tax consequences, and other relevant factors. Brokers must also match the investment appropriately to the customer’s unique investment needs and objectives such as the client’s retirement status, long or short term goals, age, disability, income needs, or any other relevant factors. Unfortunately, sometimes advisors fail to conduct sufficient research or understand the risks and prospects of the company.
The number of complaints against Gibbons are unusual compared to his peers. According to newsources, only about 7.3% of financial advisors have any type of disclosure event on their records among brokers employed from 2005 to 2015. Brokers must publicly disclose reportable events on their CRD customer complaints, IRS tax liens, judgments, investigations, and even criminal matters. However, studies have found that there are fraud hotspots such as certain parts of California, New York or Florida, where the rates of disclosure can reach 18% or higher. Moreover, according to the New York Times, BrokerCheck may be becoming increasing inaccurate and understate broker misconduct as studies have shown that 96.9% of broker requests to clean their records of complaints are granted.
Gibbons entered the securities industry in 1973. From June 2009 to April 2015, Gibbons was registered with Morgan Stanley. From February 2006 to June 2009, Gibbons was registered with Citigroup Global Markets, Inc. From October 1988 to February 2006. Gibbons was registered with Legg Mason Wood Walker, Incorporated. From April 1973 to October 1988, Gibbons was registered with Howard, Weil, Labouisse, Friedrichs Inc. Gibbons is currently not registered with any firm.
Investors who have suffered losses may be able recover their losses through securities arbitration. The attorneys at Gana Weinstein LLP are experienced in representing investors in cases of unsuitable investments and of brokerage firms failure to supervise their representatives. Our consultations are free of charge and the firm is only compensated if you recover