Bryan Chew, a broker and investment advisor associated with Commonwealth Financial Network (CRD 8032), is facing allegations from a client who claims she was not informed about the illiquid nature of an investment, despite acknowledging disclosures to that effect at the time of purchase. The customer dispute, which was filed on January 5, 2024, has been closed with no action taken against Chew.
According to the disclosure on Chew’s FINRA CRD (2004384), the client alleges that she was not told about the illiquid nature of the investment, which was a debt corporate product. However, Chew maintains that the client signed a disclosure form at the time of purchase, acknowledging that she received a prospectus and was aware of the investment’s illiquid nature.
Chew also notes that the investment in question represented a small portion of the client’s overall portfolio and that the client’s damages calculation does not account for approximately $4,000 in dividends she received. The investment is still ongoing, and no damages have been granted to the client.
Investment fraud and bad advice from financial advisors can have devastating consequences for investors. According to a Bloomberg article, the U.S. Securities and Exchange Commission (SEC) reported that fraud by investment advisers cost clients more than $1 billion in 2020 alone.
Understanding FINRA Rules and Illiquid Investments
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FINRA, the Financial Industry Regulatory Authority, maintains rules and regulations to protect investors and ensure fair practices in the financial industry. One such rule, FINRA Rule 2111, known as the “Suitability Rule,” requires brokers and investment advisors to recommend investments that are suitable for their clients based on factors such as the client’s financial situation, investment objectives, and risk tolerance.
Illiquid investments, such as certain debt corporate products, can be challenging to sell quickly without significantly impacting the price. Brokers and investment advisors must ensure that their clients understand the risks associated with illiquid investments, including the potential difficulty in selling the investment when needed.
In Bryan Chew’s case, the client acknowledged receiving a prospectus and signed a disclosure form indicating her awareness of the investment’s illiquid nature. However, the client’s allegation suggests that she may not have fully understood the implications of investing in an illiquid product.
The Importance of Transparency for Investors
Transparency is crucial in the financial industry, as it allows investors to make informed decisions about their investments. When brokers and investment advisors fail to provide clear and accurate information about the risks and characteristics of an investment, investors may find themselves in unfavorable situations.
In the case of Bryan Chew’s client, the alleged lack of transparency regarding the illiquid nature of the investment has led to a customer dispute. While the dispute has been closed with no action taken, it highlights the importance of clear communication between financial professionals and their clients.
Investors should always feel empowered to ask questions and seek clarification from their brokers or investment advisors about the investments they are considering. By understanding the risks and characteristics of an investment, investors can make more informed decisions and avoid potential issues down the line.
Recognizing Red Flags and Seeking Help
Investors should be aware of potential red flags that may indicate financial advisor malpractice or misconduct. Some common red flags include:
- Lack of transparency about investment risks and characteristics
- Pressure to make quick investment decisions
- Promises of guaranteed returns or “too good to be true” investment opportunities
- Unauthorized trades or changes to investment accounts
If investors suspect that they have been victims of financial advisor malpractice, they may be able to recover their losses through FINRA arbitration. Haselkorn & Thibaut, a national investment fraud law firm with offices in Florida, New York, North Carolina, Arizona, and Texas, is currently investigating Bryan Chew and Commonwealth Financial Network.
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. The firm operates on a contingency fee basis, meaning they charge no fees unless they successfully recover money for their clients.
Investors who have suffered losses due to the actions of Bryan Chew or Commonwealth Financial Network are encouraged to contact Haselkorn & Thibaut for a free consultation by calling their toll-free number at 1-888-628-5590.
The Path to Financial Recovery
Navigating the complexities of financial advisor malpractice can be challenging, but investors do not have to face this difficult situation alone. By working with experienced investment fraud attorneys, such as those at Haselkorn & Thibaut, investors can take steps to protect their rights and recover their losses.
As the case against Bryan Chew and Commonwealth Financial Network unfolds, it serves as a reminder of the importance of transparency, clear communication, and the need for investors to remain vigilant in protecting their financial interests. By staying informed and seeking help when necessary, investors can work towards a more secure financial future.
