Dustin West, a registered investment advisor, is facing allegations of unsuitable fixed annuity sales and failing to disclose conflicts of interest to a client. The customer complaint, filed on February 6, 2024, alleges that West and his colleague, Abeyta, did not inform the client of their insurance sales incentives, upward commission bonuses, and other conflicts of interest when recommending a particular insurance product family over other alternatives.
The client claims that she was not made aware that AWA insurance sales generated higher incentives for West and Abeyta compared to standard RIA investment management fees. As a result, the client alleges a violation of Regulation Best Interest. Additionally, the customer alleges a breach of her privacy, stating that Abeyta and West mailed her name to their new firm without her authorization. The sale in question occurred in April 2019.
The disclosure, which is now closed with no action taken, was reported on West’s FINRA CRD (Central Registration Depository) record under the disclosure type “Customer Dispute.” West is currently registered as an investment advisor but not as a broker.
Understanding Regulation Best Interest and Unsuitable Recommendations
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Regulation Best Interest (Reg BI) is a rule implemented by the Securities and Exchange Commission (SEC) that requires broker-dealers and their associated persons to act in the best interest of their retail customers when making investment recommendations. This rule aims to enhance investor protection by ensuring that financial professionals prioritize their clients’ interests over their own.
Under Reg BI, financial advisors must provide full disclosure of any conflicts of interest, such as sales incentives or commission bonuses, that could influence their investment recommendations. Failing to disclose such conflicts and making unsuitable recommendations that prioritize the advisor’s interests over the client’s can be considered a violation of Reg BI.
According to a recent study by the Securities and Exchange Commission, conflicts of interest, such as sales contests and commission-based compensation, can lead to unsuitable investment recommendations and potential harm to investors.
The Importance of Privacy and Confidentiality
Investment advisors and broker-dealers are obligated to protect their clients’ personal information and maintain confidentiality. Sharing a client’s name or other sensitive information without their explicit consent is a breach of privacy and may violate industry regulations and state privacy laws.
The Significance for Investors
This case highlights the importance of working with financial advisors who prioritize their clients’ best interests and maintain transparency regarding any potential conflicts of interest. Investors should be aware of their rights and the protections afforded to them under Regulation Best Interest and other applicable laws and regulations.
Evaluating a Financial Advisor’s Integrity
When selecting a financial advisor, investors should conduct thorough research and due diligence. This includes reviewing the advisor’s background, qualifications, and disciplinary history through resources like FINRA’s BrokerCheck and the SEC’s Investment Adviser Public Disclosure (IAPD) database.
Red flags that may indicate potential misconduct or malpractice include a history of customer complaints, regulatory actions, or disclosures related to unsuitable recommendations, misrepresentation, or breach of fiduciary duty.
Recovering Investment Losses through FINRA Arbitration
Investors who have suffered losses due to unsuitable recommendations, misrepresentation, or other forms of financial advisor misconduct may be able to recover their losses through FINRA arbitration. This process allows investors to seek compensation from their financial advisor or brokerage firm in a neutral forum outside of the court system.
Haselkorn & Thibaut, a national investment fraud law firm with offices in Florida, New York, North Carolina, Arizona, and Texas, is currently investigating Dustin West and AWA in relation to the aforementioned allegations. With over 50 years of combined experience and a 98% success rate, Haselkorn & Thibaut has a proven track record of helping investors recover their losses through FINRA arbitration.
The firm operates on a contingency fee basis, meaning they charge no fees unless they successfully recover money for their clients. Investors who believe they may have been victims of unsuitable recommendations, misrepresentation, or other forms of financial advisor misconduct are encouraged to contact Haselkorn & Thibaut for a free consultation by calling their toll-free number at 1-888-885-7162 .
As the case against Dustin West and AWA unfolds, it serves as a reminder for investors to remain vigilant, thoroughly vet their financial advisors, and promptly seek legal guidance if they suspect any wrongdoing. By working with experienced investment fraud attorneys like those at Haselkorn & Thibaut, investors can protect their rights and seek the compensation they deserve.
