In a recent development, a customer dispute has been filed against Alexander Kline, a registered representative affiliated with Cambridge Investment Research, Inc. (CRD 39543) in Pennsylvania. The statement of claim, submitted on January 19, 2024, alleges that Kline recommended a non-conventional investment without presenting the required risk disclosures, resulting in significant financial losses for the client.
Investment fraud and bad advice from financial advisors have become increasingly prevalent in recent years. According to a study by the Securities and Exchange Commission, investment fraud cases have risen by 20% since 2020, with many investors falling victim to unsuitable investment recommendations and inadequate risk disclosures.
The Allegations and Investment Details
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According to the complaint, Alexander Kline allegedly recommended a real estate security investment to the client, who had a significant cash position at a local bank and was specifically looking for an income-generating investment. The client chose the investment at issue after being presented with multiple options by Kline.
Kline’s Response to the Allegations
In his response, Alexander Kline suggests that the investment was suitable for the client, given the low interest rates and attractive dividend distributions at the time of investment. He also notes that the investment offered tax benefits. Kline states that he had no knowledge of the changes that would eventually be made to the investment, which merged with a separate program in March 2021 and went public in 2023, resulting in a devaluation.
FINRA Rules and Investor Protection
The Financial Industry Regulatory Authority (FINRA) has established rules to protect investors from potential misconduct by financial advisors. FINRA Rule 2111 requires that financial advisors have a reasonable basis to believe that a recommended investment is suitable for the client based on their investment profile, which includes factors such as age, financial situation, investment objectives, and risk tolerance.
Additionally, FINRA Rule 2210 mandates that all communications with the public, including the presentation of investment risks, must be fair, balanced, and not misleading. If a financial advisor fails to adhere to these rules, they may be held liable for any resulting losses.
The Importance of Proper Risk Disclosure
Proper risk disclosure is crucial for investors to make informed decisions about their investments. When financial advisors recommend non-conventional investments, such as real estate securities, they must clearly communicate the associated risks to their clients. Failure to do so can lead to significant financial losses and erode trust in the financial advisory relationship.
Protecting Investors’ Rights
Investors who have suffered losses due to the misconduct or negligence of their financial advisors have the right to seek recovery through FINRA arbitration. This process allows investors to present their case before a neutral panel of arbitrators who will determine whether the advisor or their firm is liable for the losses incurred.
Haselkorn & Thibaut: Investigating the Case
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 Alexander Kline and Cambridge Investment Research, Inc. With over 50 years of experience and a 98% success rate, the firm has a proven track record of helping investors recover losses through FINRA arbitration.
Investors who have worked with Alexander Kline or Cambridge Investment Research, Inc. and believe they may have been affected by improper investment recommendations or lack of risk disclosure are encouraged to contact Haselkorn & Thibaut for a free consultation. The firm operates on a “No Recovery, No Fee” basis, meaning clients only pay if a successful recovery is obtained. To discuss your case, call their toll-free number at 1-888-885-7162 .
Protecting Your Financial Future
As an investor, it is essential to remain vigilant and proactive in protecting your financial interests. If you suspect that your financial advisor has engaged in misconduct or failed to properly disclose investment risks, do not hesitate to seek legal guidance. Firms like Haselkorn & Thibaut are dedicated to helping investors navigate the complexities of FINRA arbitration and recover the losses they have suffered.
By holding financial advisors accountable for their actions and ensuring that proper risk disclosures are made, we can foster a more transparent and trustworthy financial advisory landscape. Together, let us work towards a future where investors’ rights are protected, and financial advisors prioritize their clients’ best interests.
