Cynthia Giovacchino (LPL Financial) Faces 4 Customer Complaints

Cynthia Giovacchino (LPL Financial) Faces 4 Customer Complaints

Long-time LPL Financial Advisor Cynthia Giovacchino has four customer disputes against her name. All of them emanate from her recommendations in alternative investments, mainly business development companies (BDCs) and real estate investment trusts (REITs), which have been classified as ‘unsuitable’ by these customers. Haselkorn & Thibaut has opened an investigation into Mrs. Giovacchino’s sales practices and is offering a free investment fraud consultation to her clients.

Giovacchino’s past record

A Senior Vice President at Webster Investments, Ansonia, CT-based Giovacchino has 22 years behind her in the industry. Apart from Webster, her other prior engagement was with U-Vest Financial Services.

These are the four customer disputes on her BrokerCheck record:

2018 June – Unsuitability claim by the customer that was denied.

2020 January – Unsuitability claim made by a customer on account of her recommendation for investing in REITs. The claim was settled for $36K, which was, unusually, higher than the amount sought by the customer.

2020 January – Unsuitability claim made by a customer on account of her recommendation for investing in REITs. The additional accusation in the case was of Giovacchino not disclosing the risk in investing in REITs. It was also found that she had submitted incorrect information, like his net worth, on certain key documentation. The claim was settled for $64K.

2021 September – The claim is for unsuitable recommendations for inappropriate, illiquid, alternative investments as well as for high commissions charged. This FINRA arbitration case is pending.

REIT related woes of LPL

LPL Financial has come to grief in the past in connection with the unsuitable recommendation and sale of REITs by its brokers. It is estimated that over 2,000 such transactions occurred between 2008 and 2013.

A real estate investment trust (“REIT”) refers to a trust or company that has income-producing real estate. Individual investors can have access to income-producing commercial real estate such as warehouses, offices buildings, shopping centers, and hotels through REITs. REITs can be either listed companies that trade on an exchange or non-traded (private placements or registered startups that are not yet listed). Securities regulators have been paying attention to non-traded REITs, as opposed to listed REITs, because of their potential abuse.

Non-traded REITs were again high up on FINRA’s priority list as the securities regulator reviews firms in 2015. A lack of liquidity is one of the greatest problems with non-traded REITs. Non-traded REITs can be long-term investments, usually lasting 7 years or more. There is no market for these shares, except for the rare possibility that shares could be repurchased directly by the REIT. Investors will need to wait for a liquidity event, i.e. The sale of assets or IPO. Securities regulators warn that non-traded REITs may not be suitable for short-term investors. Long-term investors should also be prepared to accept the possibility of extreme illiquidity. See FINRA Investor Alert dated August 15, 2012.

After the violation of standards involving customer suitability and concentration limits by LPL brokers had been established by a North American Securities Administrators Association (NASAA) task force, LPL had agreed to a fine of $1.4 million in 2015, apart from restitution to impacted customers.

NASAA had also highlighted the broker-dealer’s neglect of the responsibility to adequately supervise their brokers and the transactions they were doing.

REIT Fraud Investment Lawyers

Broker misconduct can adversely impact any investor. The experienced securities fraud lawyers at Haselkorn & Thibaut, P.A. (InvestmentFraudLawyers.com) have supported thousands of investors recover losses arising out of the neglect and misconduct of their brokers and broker-dealers.

While we are speaking with customers of Connecticut financial advisor Cynthia Giovacchino to determine whether any significant losses they experienced might be grounds for a securities arbitration claim, please reach out to us in case you believe you could have been a victim, to explore your legal options.

A free, no-obligation case assessment, can be scheduled by calling Haselkorn & Thibaut at 1-800-856-3352.

 

Scroll to Top