Investors need to be aware of the seriousness of allegations against brokers and investment firms. Recently, a case involving Traderfield Securities Inc. (CRD 20130) and Mario Divita has drawn attention due to its implications for investor protection. The case is being investigated by Haselkorn & Thibaut, a national investment fraud law firm with a remarkable track record of successful financial recoveries for investors.
Allegation’s Seriousness and Case Information
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The case against Traderfield Securities Inc. and Mario Divita involves serious allegations of failure to establish, maintain, and enforce a supervisory system, including Written Supervisory Procedures (WSPs). According to the findings, the firm and Divita knew that two of the firm’s representatives were engaged in outside activities that involved investment funds and private placement offerings. However, they failed to evaluate these activities to determine whether they constituted outside securities activities.
The representatives in question raised $60 million from over 200 individual investors through investment funds they owned and managed. These activities were presented to the firm and Divita as Outside Business Activities (OBAs), indicating that they were investment-related. Despite this, neither Divita nor the firm evaluated these proposed activities to determine whether they should be restricted or prohibited, or whether they should have been treated as outside securities activities.
The findings also stated that the firm’s WSPs did not reference or require the firm to comply with the requirements of FINRA Rule 3270.01. The firm and Divita consented to the sanctions without admitting or denying the findings.
Explanation in Simple Terms and the FINRA Rule
In simple terms, the firm and Divita were accused of failing to properly supervise their representatives’ outside activities. They did not evaluate whether these activities constituted outside securities activities, which could potentially interfere with the representatives’ responsibilities to the firm or its customers.
FINRA Rule 3270.01 requires firms to supervise their representatives’ OBAs. The rule is designed to prevent conflicts of interest and protect investors. In this case, the firm’s failure to comply with this rule led to the representatives raising $60 million from over 200 individual investors through investment funds they owned and managed.
Why It Matters for Investors
Investor protection is at the heart of FINRA rules. When these rules are violated, it can lead to significant losses for investors. In this case, the representatives raised $60 million from over 200 individual investors through investment funds they owned and managed. If the firm and Divita had properly supervised these activities, they could potentially have prevented these losses.
Investors need to be aware of the risks associated with investing and the importance of broker supervision. When brokers and firms fail to follow FINRA rules, it can lead to significant financial harm for investors.
Red Flags for Financial Advisor Malpractice and How Investors Can Recover Losses
There are several red flags for financial advisor malpractice. These include failure to supervise, failure to disclose conflicts of interest, and failure to comply with FINRA rules. In this case, the firm and Divita failed to supervise their representatives’ outside activities, which led to significant losses for investors.
Investors who have suffered losses due to broker malpractice can recover their losses through FINRA arbitration. Haselkorn & Thibaut is currently investigating the case against Traderfield Securities Inc. and Mario Divita. With over 50 years of experience and a 98% success rate, the firm offers free consultations to clients and operates on a “No Recovery, No Fee” policy. Investors can contact the firm at their toll-free consultation number, 1-800-856-3352.
Investors should always be aware of the risks associated with investing and the importance of broker supervision. By being vigilant and seeking legal help when necessary, investors can protect their financial interests.
