Craig Rottman, a broker and investment advisor associated with Aurora Securities (CRD 46147) and Classic, LLC (CRD 159357), is facing serious allegations of misconduct from a client in North Dakota. The client has filed a pending customer dispute, alleging negligence, gross negligence, breach of fiduciary duty, breach of contract, fraud, negligent misrepresentations, negligent supervision, and violations of state, SEC, and FINRA rules.
The complaint specifically cites violations of 10-04-15 of the North Dakota Securities Act of 1951, Section 206(4) of and Rule 206(4)-7 under the Investment Advisers Act of 1940, FINRA Rule 2010, Standards of Commercial Honor and Principals of Trade, FINRA Rule 2111 (Suitability), FINRA Rule 3010 (Supervision), and FINRA Rule 2020 (Use of Manipulative, Deceptive or Other Fraudulent Devices). The dispute, filed on February 12, 2024, remains unresolved and involves leveraged ETFs as the product type.
Understanding the Allegations and FINRA Rules
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The client’s allegations against Craig Rottman and his associated firms encompass a wide range of misconduct. Negligence and gross negligence suggest that the advisor failed to exercise reasonable care in handling the client’s investments. Breach of fiduciary duty implies that Rottman did not act in the client’s best interests, while breach of contract indicates a violation of the agreed-upon terms between the advisor and the client.
The complaint also alleges fraud and negligent misrepresentations, suggesting that the advisor may have provided false or misleading information to the client. Negligent supervision points to a failure by Aurora Securities and Classic, LLC to adequately oversee Rottman‘s activities. According to a Forbes article, investment fraud and bad advice from financial advisors can lead to significant financial losses for investors.
The cited FINRA rules are designed to protect investors and maintain integrity in the financial markets. FINRA Rule 2010 requires brokers to observe high standards of commercial honor and just and equitable principles of trade. Rule 2111 obligates brokers to recommend suitable investments based on a client’s financial situation, risk tolerance, and investment objectives. Rule 3010 mandates that firms establish and maintain a system to supervise their brokers’ activities, while Rule 2020 prohibits the use of manipulative, deceptive, or fraudulent devices.
The Significance for Investors
This case highlights the importance of working with trustworthy and ethical financial advisors. Investors rely on their advisors to provide sound guidance and act in their best interests. When an advisor engages in misconduct, such as recommending unsuitable investments or providing misleading information, it can lead to significant financial losses for the investor.
The allegations against Craig Rottman involve leveraged ETFs, which are complex financial products that carry substantial risks. These instruments aim to amplify the daily returns of an underlying index, but their performance can deviate significantly from the index over longer periods. Leveraged ETFs are generally considered unsuitable for long-term investors and require careful monitoring and understanding of their unique risks.
Investors who have worked with Craig Rottman or his associated firms should closely review their investment portfolios and account statements for any irregularities or losses. If misconduct is suspected, investors should promptly seek legal guidance to protect their rights and explore potential avenues for recovery.
Red Flags and Recovering Losses
Investors can watch for several red flags that may indicate financial advisor malpractice:
- Unexplained or inconsistent account performance
- Unauthorized trades or excessive trading activity
- Lack of transparency or communication from the advisor
- Pressure to invest in unsuitable or high-risk products
- Promises of guaranteed returns or “too good to be true” investment opportunities
If an investor suspects misconduct and has suffered losses, they may be able to recover damages through FINRA arbitration. This process allows investors to seek compensation from their financial advisor or brokerage firm before a neutral panel of arbitrators.
Haselkorn & Thibaut, a national investment fraud law firm with offices in Florida, New York, North Carolina, Arizona, and Texas, is currently investigating Craig Rottman and his associated firms. With over 50 years of combined experience and a 98% success rate, Haselkorn & Thibaut has a proven track record of helping investors recover losses resulting from financial advisor misconduct.
Investors who have worked with Craig Rottman or his associated firms are encouraged to contact Haselkorn & Thibaut for a free consultation at 1-888-885-7162 . The firm operates on a contingency basis, meaning there are no fees unless a recovery is obtained.
