Allegations of malpractice in the financial industry are a serious matter, and it’s crucial that investors understand the gravity of these situations. Recently, an allegation has been made against Frederick Hohensee, a broker and investment advisor at ABACUS INVESTMENTS, INC. The allegation, currently pending, involves a customer dispute regarding a drop in values from June 2022 through August 2023, with a reported loss of $50,000.
Understanding the Allegation and FINRA Rule
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When a financial advisor acts against the best interests of their clients, it’s considered a breach of fiduciary duty. This can occur in various ways, including making unsuitable investment recommendations, engaging in unauthorized trading, or failing to adequately disclose risks. In Frederick Hohensee’s case, the allegation involves a significant drop in investment values.
The Financial Industry Regulatory Authority (FINRA) has rules in place to protect investors from such malpractices. FINRA Rule 2111, for instance, requires brokers to have a reasonable basis to believe that a recommended transaction or investment strategy is suitable for the customer. This rule is based on the information obtained through the reasonable diligence of the member or associated person to ascertain the customer’s investment profile.
Why This Matters for Investors
Allegations of this nature are significant for investors as they highlight potential risks associated with a particular advisor or firm. They serve as a reminder of the importance of regularly reviewing one’s investments and the performance of their financial advisor. The alleged drop in value could indicate possible negligence or misconduct on the part of the advisor.
Red Flags and Recovery of Losses
Investors should be aware of red flags that could indicate financial advisor malpractice. These can include unexplained losses, unauthorized transactions, or excessive trading in your account. If you notice any of these signs, it’s important to take action promptly.
Investors who have suffered losses due to advisor misconduct can recover their losses through FINRA Arbitration. This process involves presenting your case before an independent arbitrator who will make a binding decision.
Haselkorn & Thibaut, a national investment fraud law firm with offices in Florida, New York, North Carolina, Arizona, and Texas, is currently investigating the advisor and company involved in this allegation. With over 50 years of experience and a successful track record of financial recoveries for investors, they offer a free consultation to clients. Their impressive 98% success rate speaks volumes about their expertise in handling such cases. To reach out to them, you can call their toll-free consultation number at 1-800-856-3352. They operate on a “No Recovery, No Fee” policy, ensuring you only pay when they successfully recover your losses.
Remember, allegations like the one against Frederick Hohensee are serious and should not be taken lightly. It’s crucial to remain vigilant and proactive in managing your investments and seeking legal help when necessary.
