Farid Farhoumand of H. Beck Inc. Faces Customer Dispute Over Investment Allegations

Farid Farhoumand, a financial advisor associated with H. BECK, INC. and NEXT FINANCIAL GROUP, INC. (CRD 46214), is facing a serious customer dispute alleging misrepresentation of risks and unsuitable investment recommendations. The clients claim that between July 14 and September 12, 2014, Farhoumand misrepresented the risks associated with two business development companies (BDCs) and that the investments were unsuitable for their financial situation. The alleged damages amount to $100,000.00.

This allegation, filed on August 21, 2023, and currently pending, raises significant concerns for investors who have worked with Farid Farhoumand or invested in the mentioned BDCs. The potential impact on investors’ portfolios and financial well-being cannot be understated, as misrepresentation and unsuitable investment advice can lead to substantial losses.

Haselkorn & Thibaut, a national investment fraud law firm with offices in Florida, New York, North Carolina, Arizona, and Texas, is currently investigating Farid Farhoumand and the associated companies. With over 50 years of experience and a 98% success rate, Haselkorn & Thibaut is committed to helping investors recover their losses through FINRA Arbitration. They offer free consultations to affected clients and operate on a “No Recovery, No Fee” policy. Investors can reach out to them for assistance at their toll-free number: 1-800-856-3352.

Understanding the Allegation and FINRA Rules

The complaint against Farid Farhoumand revolves around the alleged misrepresentation of risks associated with two business development companies (BDCs) and the unsuitability of these investments for the clients. BDCs are a type of closed-end investment company that primarily invests in small and mid-sized businesses, often providing capital in the form of loans or equity investments.

FINRA Rule 2111, known as the “Suitability Rule,” requires financial advisors to have a reasonable basis to believe that a recommended transaction or investment strategy is suitable for the customer, based on the customer’s investment profile. This profile includes factors such as the customer’s age, financial situation, investment objectives, and risk tolerance.

Additionally, FINRA Rule 2020 prohibits financial advisors from making untrue statements or omitting material facts in connection with the purchase or sale of securities. Misrepresenting the risks associated with an investment violates this rule and can lead to disciplinary action by FINRA.

The Importance for Investors

The allegation against Farid Farhoumand serves as a stark reminder of the importance of working with trustworthy and transparent financial advisors. Misrepresentation of investment risks and unsuitable recommendations can have devastating consequences for investors, leading to significant financial losses and derailing their long-term financial goals.

Investors must remain vigilant and thoroughly research their financial advisors before entrusting them with their hard-earned money. Checking an advisor’s background, including their FINRA CRD record, can provide valuable insights into their disciplinary history and any past customer disputes.

Furthermore, investors should always ensure that they fully understand the risks associated with any investment before proceeding. If an advisor’s explanations seem unclear or the investment appears too good to be true, it may be prudent to seek a second opinion or additional information from reliable sources.

Red Flags and Recovering Losses

Investors should be aware of potential red flags that may indicate financial advisor malpractice:

  • Promising guaranteed returns or downplaying investment risks
  • Recommending investments that do not align with the investor’s risk tolerance or financial goals
  • Failing to provide clear and detailed explanations of investment products and their associated risks
  • Pressuring investors to make quick decisions or invest in unfamiliar products

If investors suspect that they have fallen victim to financial advisor misconduct, such as in the case of Farid Farhoumand, they may be able to recover their losses through FINRA Arbitration. This process allows investors to seek compensation for damages caused by the advisor’s wrongdoing.

Haselkorn & Thibaut, with their extensive experience and impressive track record, can guide investors through the FINRA Arbitration process and fight for their rights. Their team of skilled attorneys is dedicated to holding financial advisors accountable and securing the best possible outcomes for their clients.

Investors who have suffered losses due to the alleged misconduct of Farid Farhoumand or any other financial advisor should not hesitate to seek legal assistance. By calling Haselkorn & Thibaut‘s toll-free number at 1-800-856-3352, investors can schedule a free consultation and take the first step towards protecting their financial future.

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