Merrill Lynch advisor Donald Hansen is currently under investigation for allegedly excessively trading a client’s account and failing to act in her best interest between January 2021 and January 2024. The client has filed a pending customer dispute against Hansen, who was registered with Merrill Lynch, Pierce, Fenner & Smith Incorporated (CRD 7691) in California from October 23, 2009, to March 22, 2024. The allegations involve municipal debt products, and the client is seeking damages. Hansen is no longer registered as a broker or investment advisor, according to his FINRA BrokerCheck profile.
The client’s complaint raises serious concerns about the advisor’s conduct and the potential violation of FINRA rules. Excessive trading, also known as churning, occurs when a broker engages in unnecessary transactions to generate commissions at the expense of the client’s best interests. FINRA Rule 2111, known as the suitability rule, requires brokers to have a reasonable basis for believing that a recommended transaction or investment strategy is suitable for the customer based on their investment profile. This profile includes factors such as age, financial situation, investment objectives, and risk tolerance.
Investment fraud and bad advice from financial advisors can have devastating consequences for investors. According to a Bloomberg article, investment fraud reached record levels in 2020, with vulnerable investors falling prey to scams and unscrupulous advisors.
Understanding FINRA Rules and Excessive Trading
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FINRA rules are designed to protect investors from unethical practices and ensure that financial advisors act in their clients’ best interests. When an advisor engages in excessive trading, they may be prioritizing their own financial gain over the client’s investment goals and risk tolerance. This can lead to significant losses for the investor and a breach of trust in the advisor-client relationship.
The Importance of Suitability in Investment Recommendations
The suitability rule is a critical component of investor protection. It mandates that advisors consider a client’s unique circumstances and investment objectives when making recommendations. By allegedly disregarding the client’s best interests and engaging in excessive trading, Donald Hansen may have violated this fundamental rule, putting the client’s financial well-being at risk.
Protecting Investor Rights and Recovering Losses
Investors who have suffered losses due to advisor misconduct have the right to seek recovery through FINRA arbitration. This process allows investors to present their case before a neutral panel and potentially recoup damages. It is crucial for investors to be aware of red flags that may indicate advisor malpractice, such as unauthorized trades, excessive fees, or a lack of communication.
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 Donald Hansen and Merrill Lynch. 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.
Seeking Legal Guidance and Representation
Investors who believe they have been victims of advisor misconduct or excessive trading are encouraged to contact Haselkorn & Thibaut for a free consultation. The firm operates on a “No Recovery, No Fee” basis, ensuring that clients can pursue their claims without upfront costs. With their extensive experience and commitment to investor protection, Haselkorn & Thibaut is well-equipped to guide investors through the FINRA arbitration process and fight for their rights.
Taking Action to Protect Your Financial Future
If you have invested with Donald Hansen or Merrill Lynch and suspect that your account has been excessively traded or mishandled, do not hesitate to reach out to Haselkorn & Thibaut. Their toll-free number is 1-888-628-5590, and their team of experienced attorneys is ready to provide the guidance and representation you need to protect your financial future.
Remember, as an investor, you have the right to expect ethical conduct and adherence to FINRA rules from your financial advisor. When those expectations are not met, and your investments are put at risk, it is essential to take action and seek the help of qualified professionals who can advocate for your rights and help you recover any losses you may have incurred.
