A recent development has brought to light a customer dispute filed against John Ekeanyanwu, a broker and investment advisor associated with Ameriprise Financial Services, LLC (CRD 6363) in Arkansas. The claimants allege that from January 1, 2016, to December 31, 2022, Ekeanyanwu invested their funds in a Real Estate Investment Trust (REIT) without their authorization and in variable annuities that were deemed unsuitable for their financial situation. Unfortunately, cases like this are not uncommon, as investment fraud and bad advice from financial advisors continue to plague the industry.
The case, which was initially filed in an Arkansas state court, has been ordered to proceed through FINRA arbitration, with the litigation matter being stayed pending the outcome of the arbitration process. The FINRA arbitration was officially received on January 9, 2024, and is currently pending resolution.
According to the information available on Ekeanyanwu’s FINRA BrokerCheck profile (CRD #2860330), he has been registered as a broker and investment advisor with Ameriprise Financial Services, LLC in Arkansas since June 10, 1997. The details of the alleged unauthorized REIT investment and the unsuitable variable annuities have not been disclosed, and the damage amount requested by the claimants remains undisclosed at this time.
Understanding REITs and Variable Annuities
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Real Estate Investment Trusts (REITs) are investment vehicles that pool capital from multiple investors to purchase and manage income-generating real estate properties or mortgage loans. REITs offer investors the opportunity to invest in real estate without directly owning or managing the properties themselves. However, REITs come with their own set of risks, including market fluctuations, property-specific issues, and liquidity concerns.
Variable annuities, on the other hand, are complex investment products that combine features of insurance and investment contracts. They provide investors with the potential for tax-deferred growth and the option to receive a stream of payments over a specified period or for the remainder of their lives. However, variable annuities often come with high fees, surrender charges, and market risks, making them unsuitable for some investors, as explained in this Investopedia article on variable annuities.
FINRA Rule 2111, known as the “Suitability Rule,” requires brokers and investment advisors to have a reasonable basis to believe that a recommended investment or investment strategy is suitable for the customer, based on the customer’s investment profile. This profile includes factors such as age, financial situation, investment objectives, and risk tolerance.
The Importance of Suitability and Investor Protection
The allegations against John Ekeanyanwu and Ameriprise Financial Services, LLC highlight the importance of investor protection and the role of FINRA in regulating the financial industry. When brokers or investment advisors recommend unsuitable investments or make unauthorized transactions, they put their clients’ financial well-being at risk.
Investors rely on the expertise and guidance of their financial professionals to make informed decisions about their investments. When this trust is violated, and unsuitable or unauthorized investments are made, investors can suffer significant financial losses. These losses can have far-reaching consequences, impacting retirement plans, education funds, and overall financial stability.
FINRA arbitration provides a platform for investors to seek redress and recover losses stemming from broker misconduct or unsuitable investment recommendations. By filing a claim through FINRA arbitration, investors can have their case heard by a panel of impartial arbitrators who have the authority to award damages if wrongdoing is found.
Recognizing Red Flags and Seeking Help
Investors should be aware of potential red flags that may indicate financial advisor malpractice or misconduct. Some warning signs include:
- Unauthorized transactions or investments made without the client’s consent
- Recommendations of unsuitable or overly complex investment products
- Lack of transparency or reluctance to provide clear explanations about investment strategies
- Excessive trading or churning of client accounts to generate commissions
- Pressure to make quick investment decisions without adequate time for consideration
If investors suspect that they have been the victim of financial advisor malpractice or unsuitable investment recommendations, they should consider seeking the assistance of an experienced investment fraud law firm. Haselkorn & Thibaut, a national investment fraud law firm with offices in Florida, New York, North Carolina, Arizona, and Texas, is currently investigating the allegations against John Ekeanyanwu and Ameriprise Financial Services, LLC.
With over 50 years of combined experience and a 98% success rate, Haselkorn & Thibaut has a proven track record of helping investors recover losses through FINRA arbitration. They offer free consultations to investors and operate on a contingency fee basis, meaning clients pay no fees unless a recovery is secured. Investors can contact Haselkorn & Thibaut toll-free at 1-888-628-5590 to discuss their case and explore their legal options.
As the case against John Ekeanyanwu and Ameriprise Financial Services, LLC progresses through the FINRA arbitration process, investors should remain vigilant and proactive in protecting their financial interests. By staying informed, recognizing potential red flags, and seeking the guidance of experienced professionals, investors can take steps to safeguard their investments and hold financial advisors accountable for any misconduct or unsuitable recommendations.
