In a recent development, a client has filed a complaint against Chris Abeyta and his employee Bekeza, alleging improper account servicing that resulted in the loss of accrued gains. The client, who filed the dispute on January 23, 2024, claims that Abeyta failed to disclose insurance sales incentives, upward commission bonuses, and other conflicts of interest involved in the sale of one particular insurance product family over other alternatives.
According to the allegations, the client was not informed that AWA insurance sales generated higher incentives for Abeyta to sell insurance as opposed to standard AWA/RIA investment management fees. As a result, the client alleges a violation of Regulation Best Interest, which requires financial advisors to act in the best interest of their clients when making investment recommendations. Regulation Best Interest was implemented by the SEC to enhance investor protection and improve the quality of advice provided by financial professionals.
The client’s complaint, which is currently pending resolution, raises concerns about the transparency and integrity of the financial advice provided by Chris Abeyta and his firm. The potential damages claimed by the client have not been disclosed at this time. Investment fraud and bad advice from financial advisors can have devastating consequences for investors, as highlighted by numerous cases in recent years.
Understanding the allegations and FINRA rules
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The allegations against Chris Abeyta revolve around the failure to disclose conflicts of interest related to insurance sales incentives and commission bonuses. According to FINRA Rule 2020, “No member shall effect any transaction in, or induce the purchase or sale of, any security by means of any manipulative, deceptive or other fraudulent device or contrivance.”
Furthermore, FINRA Rule 2111 requires that a broker-dealer or associated person “have a reasonable basis to believe that a recommended transaction or investment strategy involving a security or securities is suitable for the customer.” This includes considering the customer’s investment profile, risk tolerance, and financial goals.
In this case, the client alleges that Abeyta prioritized the sale of insurance products that generated higher incentives for himself, rather than considering the client’s best interests. This conduct, if proven, would violate FINRA rules and the principles of Regulation Best Interest. Investors can check the background and disciplinary history of their financial advisors using FINRA’s BrokerCheck tool.
The importance for investors
The allegations against Chris Abeyta underscore the importance of transparency and trust in the financial advisor-client relationship. Investors rely on their advisors to provide unbiased advice and recommendations that align with their financial goals and risk tolerance.
When advisors fail to disclose conflicts of interest or prioritize their own financial gain over their clients’ best interests, it erodes the trust that is essential for a successful working relationship. Investors must be vigilant in monitoring their investments and questioning any recommendations that seem inconsistent with their goals or risk tolerance.
Moreover, this case highlights the significance of Regulation Best Interest, which was implemented to protect investors by requiring financial advisors to act in their clients’ best interests. Investors should familiarize themselves with these regulations and their rights as consumers of financial services.
Recognizing red flags and seeking help
Investors should be aware of potential red flags that may indicate financial advisor malpractice or misconduct. These include:
- Lack of transparency regarding fees, commissions, or conflicts of interest
- Recommendations that seem inconsistent with the investor’s goals or risk tolerance
- Pressure to make quick investment decisions or to invest in specific products
- Unexplained or significant losses in investment accounts
If investors suspect that they have been the victim of financial advisor misconduct, 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 Chris Abeyta and his firm.
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. They offer free consultations and work on a contingency basis, meaning clients pay no fees unless a recovery is made.
Investors who believe they may have been affected by the alleged misconduct of Chris Abeyta or any other financial advisor should contact Haselkorn & Thibaut at 1-888-885-7162 to discuss their legal options.
As more information becomes available about the allegations against Chris Abeyta, it serves as a reminder for investors to remain vigilant, ask questions, and seek help when needed. By working with experienced legal professionals like those at Haselkorn & Thibaut, investors can protect their rights and recover losses resulting from financial advisor misconduct.
