Investors and industry professionals alike are well aware that allegations against financial advisors and their respective firms are serious business. They can have far-reaching implications not only for the parties directly involved but also for the broader investment community. This is especially true when the allegations involve violations of the Financial Industry Regulatory Authority (FINRA) rules, as is the case with the recent complaint lodged against Kelly Lawson and Portsmouth Financial Services.
Allegation’s Seriousness, Case Information, and Impact on Investors
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On August 23, 2023, a pending customer dispute was filed, naming Portsmouth Financial Services as the respondent and Kelly Lawson as the account executive responsible for handling the transactions. The Statement of Claim includes allegations of Violation of FINRA Rules of Fair Practice, Unsuitable recommendations, and Supervision and Disclosure failures. The claim is seeking damages of $100,001.00. Lawson is not the Broker of Record for the complaining customer’s account and has denied and refuted the allegations in their entirety. The seriousness of these allegations cannot be overstated, as they potentially indicate a breach of investor trust and a failure to uphold industry standards.
Such allegations can have a significant impact on investors, both in terms of potential financial loss and shaken confidence in the investment process. The alleged violations may lead to regulatory penalties for the firm and its advisors, which can in turn affect its reputation and ability to attract and retain clients.
Explanation in Simple Terms and the FINRA Rule
The FINRA Rules of Fair Practice are a set of regulations designed to ensure fair and ethical practices in the securities industry. They cover a broad range of topics, including professional conduct, customer relations, and trading practices. In this case, the allegations suggest that Portsmouth Financial Services and Kelly Lawson may have violated these rules, specifically in relation to unsuitable recommendations and failures in supervision and disclosure.
Unsuitable recommendations refer to advice given by a financial advisor that does not align with the client’s investment objectives, financial situation, or risk tolerance. Supervision and disclosure failures, on the other hand, involve a lack of oversight by the firm over its advisors and a failure to disclose essential information to clients. Both of these alleged violations can lead to significant financial losses for investors.
Why It Matters for Investors
These allegations matter a great deal to investors. If true, they suggest that Portsmouth Financial Services and Kelly Lawson may have compromised their clients’ financial wellbeing by providing unsuitable recommendations and failing to adequately supervise and disclose critical information. This can lead to a loss of trust in the firm and its advisors, potentially causing investors to withdraw their funds and seek advice elsewhere.
Moreover, such allegations can serve as a reminder to investors of the importance of due diligence when selecting a financial advisor or investment firm. They underscore the need for transparency, communication, and adherence to industry standards in the investment process.
Red Flags for Financial Advisor Malpractice and How Investors Can Recover Losses
Investors should be vigilant for signs of financial advisor malpractice. These may include frequent and unexplained trades, investments that do not align with their risk tolerance or financial goals, and a lack of clear and regular communication from the advisor or firm. If such red flags are present, it may be time to consider seeking legal advice.
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 Kelly Lawson and Portsmouth Financial Services. With over 50 years of experience and a 98% success rate, they have successfully helped many investors recover their losses through FINRA Arbitration. They offer free consultations to clients and operate under a “No Recovery, No Fee” policy. Investors can contact them at their toll-free number, 1-800-856-3352, for more information.
FINRA Arbitration is a dispute resolution process where a neutral third party, known as an arbitrator, reviews the facts of a case and makes a decision. It can be a quicker and more cost-effective alternative to court litigation, and can help investors recover losses resulting from financial advisor malpractice.
Investors are encouraged to learn more about Portsmouth Financial Services by visiting their FINRA CRD number 13980 on BrokerCheck.
