In a recent development, a client has brought forth allegations against Chris Abeyta, an investment advisor, claiming that Abeyta failed to disclose crucial information regarding insurance sales incentives, upward commission bonuses, and other conflicts of interest. The client alleges that Abeyta did not inform him of the higher incentives generated from selling a particular insurance product family over other alternatives, and that these incentives were prioritized over offering standard investment management fees through AWA/RIA.
The allegations also include a violation of the SEC’s Regulation Best Interest and the Colorado Best Interest Rule, which require financial advisors to act in the best interest of their clients and disclose any potential conflicts of interest. Furthermore, the client alleges that Abeyta unauthorized disclosed private client information without proper authorization.
As of February 2, 2024, the customer dispute remains pending, and the potential damages requested by the client have not been disclosed. Chris Abeyta, who holds the FINRA CRD number 6403098, is currently registered as an investment advisor but not as a broker.
Understanding the Allegations and FINRA Rules
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The allegations against Chris Abeyta center around the lack of transparency regarding insurance sales incentives and potential conflicts of interest. According to FINRA Rule 2020, which prohibits manipulative and deceptive devices, financial advisors must disclose any material information that could influence a client’s investment decisions.
Additionally, the SEC’s Regulation Best Interest requires broker-dealers and their associated persons to act in the best interest of their clients when making recommendations. This includes disclosing any conflicts of interest, such as higher commissions or incentives tied to specific products.
The unauthorized disclosure of private client information is also a serious concern, as it violates the trust and confidentiality expected in the advisor-client relationship. FINRA Rule 2060 prohibits the improper use of customer funds or securities, which extends to the misuse of client information.
Investment fraud and bad advice from financial advisors are unfortunately common occurrences. According to a Forbes article, investors lose billions of dollars each year due to fraudulent activities and misleading advice from financial professionals.
The Significance for Investors
This case highlights the importance of transparency and trust in the financial advisor-client relationship. Investors rely on their advisors to provide unbiased guidance and recommendations that align with their best interests. When advisors fail to disclose conflicts of interest or prioritize their own financial gain over their clients’ well-being, it erodes the foundation of this relationship.
Investors have the right to be informed about any incentives or conflicts that may influence their advisor’s recommendations. This information allows them to make informed decisions about their investments and to assess whether their advisor is truly acting in their best interest.
Moreover, the unauthorized disclosure of private client information is a severe breach of trust. Investors should feel secure in knowing that their personal and financial information is kept confidential and only used for legitimate purposes related to their investment management.
Red Flags and Recovering Losses
Investors should be vigilant for potential red flags that may indicate financial advisor malpractice. These include:
- Lack of transparency regarding fees, commissions, and incentives
- Recommendations that seem to prioritize the advisor’s interests over the client’s
- Unauthorized trades or account activity
- Difficulty obtaining clear answers or documentation from the advisor
If investors suspect that they have fallen victim to financial advisor malpractice, they may be able to recover their losses through FINRA arbitration. This process allows investors to seek compensation for damages caused by their advisor’s misconduct or negligence.
Haselkorn & Thibaut, a national investment fraud law firm with offices in Florida, New York, North Carolina, Arizona, and Texas, is currently investigating Chris Abeyta and his company. With over 50 years of experience and a 98% success rate, Haselkorn & Thibaut has a proven track record of helping investors recover losses through FINRA arbitration.
Investors who have suffered losses due to the actions of Chris Abeyta or any other financial advisor are encouraged to contact Haselkorn & Thibaut for a free consultation. The firm operates on a “No Recovery, No Fee” basis, ensuring that clients can seek justice without upfront costs. To learn more, call their toll-free number at 1-888-885-7162 .
