Patrick Mendenhall, a broker and investment advisor associated with USCA Securities LLC, is currently facing a customer dispute filed on January 12, 2024. The dispute, which is still pending resolution, involves allegations related to equity listed securities and options. According to the disclosure details, the client, who is described as a sophisticated investor with extensive experience in the financial services industry, claims losses and missed opportunities in a specific account managed by Mendenhall.
The client, who has a thirty-year relationship with Mendenhall, maintains a net worth of over $20 million and has indicated an aggressive risk tolerance with a primary objective of capital appreciation. The dispute centers around a specific stock and related options that were first purchased by the client over eight years ago. Mendenhall asserts that the client was actively involved in managing the stock and that all transactions were discussed with the client. Additionally, Mendenhall notes that the client maintained other accounts with the firm and had overall gains while at the firm.
Haselkorn & Thibaut, a national investment fraud law firm with offices in Florida, New York, North Carolina, Arizona, and Texas, is currently investigating Patrick Mendenhall and USCA Securities LLC in relation to this customer dispute. With over 50 years of experience and a 98% success rate, Haselkorn & Thibaut offers free consultations to clients who may have suffered losses due to financial advisor malpractice. Investors can contact the firm toll-free at 1-888-628-5590 for a consultation, and the firm operates on a “No Recovery, No Fee” policy.
Understanding the FINRA Rule Violations
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The allegations against Patrick Mendenhall may involve violations of FINRA rules, which are designed to protect investors and ensure fair and transparent practices in the financial industry. FINRA, or the Financial Industry Regulatory Authority, is a self-regulatory organization that oversees broker-dealers and their registered representatives.
In this case, the alleged misconduct may be related to FINRA Rule 2111, known as the “Suitability Rule.” This rule requires brokers to have a reasonable basis to believe that a recommended transaction or investment strategy is suitable for the customer, based on the customer’s investment profile. The investment profile includes factors such as the customer’s age, financial situation, investment objectives, and risk tolerance.
If Mendenhall recommended investments or strategies that were not suitable for the client, despite the client’s aggressive risk tolerance and capital appreciation objectives, he may have violated the Suitability Rule. Additionally, if Mendenhall failed to properly disclose the risks associated with the investments or did not provide adequate information to the client, he may have breached his fiduciary duty and violated other FINRA rules related to transparency and disclosure.
The Importance for Investors
This case highlights the importance of working with trustworthy and ethical financial advisors who prioritize their clients’ best interests. Investors should be aware of the potential for misconduct and malpractice in the financial industry and take steps to protect themselves.
When selecting a financial advisor, investors should:
- Research the advisor’s background and disciplinary history using resources like FINRA’s BrokerCheck
- Ensure that the advisor’s investment philosophy and strategies align with their own goals and risk tolerance
- Ask questions and request clear explanations of any proposed investments or strategies
- Monitor their accounts regularly and report any suspicious activity or unauthorized trades promptly
By staying informed and vigilant, investors can reduce the risk of falling victim to financial advisor misconduct and protect their hard-earned investments. According to a Forbes article, investors should also be cautious of advisors who promise unrealistic returns or pressure them into making quick decisions without proper due diligence.
Red Flags and Recovering Losses
Investors should be aware of red flags that may indicate financial advisor malpractice, such as:
- Unexplained or excessive account losses
- Unauthorized trades or transactions
- Lack of communication or evasive behavior from the advisor
- Pressure to make quick investment decisions or invest in high-risk products
If an investor suspects that they have been a victim of financial advisor malpractice, they should take immediate action to protect their interests. This may include:
- Documenting all communications and transactions with the advisor
- Reporting the misconduct to the appropriate authorities, such as FINRA or the SEC
- Seeking legal counsel from experienced investment fraud attorneys
Investors who have suffered losses due to financial advisor malpractice may be able to recover their losses through FINRA arbitration. FINRA arbitration is a dispute resolution process that allows investors to seek compensation for losses caused by broker misconduct or negligence.
Haselkorn & Thibaut, with their extensive experience and impressive success rate, can help investors navigate the FINRA arbitration process and work to recover their losses. Their team of skilled attorneys understands the complexities of investment fraud cases and is committed to fighting for their clients’ rights.
As the investigation into Patrick Mendenhall and USCA Securities LLC unfolds, investors who have concerns about their accounts or believe they may have been victims of malpractice should not hesitate to seek legal guidance. By taking proactive steps and working with experienced professionals, investors can protect their financial futures and hold wrongdoers accountable.
