Chris Abeyta, a financial advisor, is currently facing allegations from clients who claim that he failed to disclose various incentives that may have influenced his decision to recommend fixed annuities over other investments. According to the allegations, Abeyta received substantially higher commissions by selling fixed annuities compared to the advisory fees he would have earned for investing assets with third-party money managers.
The clients also allege that Abeyta did not disclose the incentives he received from the policy issuer and field marketing organization, which might have swayed his recommendation of annuities over other investment options. These incentives included higher commissions from annuity sales compared to advisory fees for investing assets with a third-party money manager. Furthermore, the clients claim that Abeyta failed to disclose the bonuses he received for reaching certain annuity sales levels, in addition to his standard commission on such sales.
The allegations suggest a complete breakdown in Abeyta’s obligations under the best interest rules of both Colorado and the SEC. Haselkorn & Thibaut, a national investment fraud law firm with offices in Florida, New York, North Carolina, Arizona, and Texas, is currently investigating Chris Abeyta and his company. They offer free consultations to clients who may have been affected by this alleged misconduct.
Investment fraud and bad advice from financial advisors can have devastating consequences for investors. According to a study by Bloomberg, investment fraud costs Americans billions of dollars each year. It’s crucial for investors to be aware of the potential red flags and to conduct thorough research before entrusting their money to a financial advisor.
Understanding the Allegations and FINRA Rule
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The allegations against Chris Abeyta revolve around his failure to disclose the various incentives he received for recommending fixed annuities to his clients. According to FINRA Rule 2111, known as the “Suitability Rule,” a broker-dealer must 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.
The rule also requires broker-dealers to disclose any material conflicts of interest associated with their recommendations. In this case, the alleged failure to disclose the higher commissions, bonuses, and other incentives received by Abeyta may constitute a violation of FINRA Rule 2111.
Furthermore, the allegations suggest that Abeyta may have violated the best interest rules of both Colorado and the SEC. These rules require financial advisors to act in the best interest of their clients and to disclose any conflicts of interest that may influence their recommendations.
The Importance for Investors
The allegations against Chris Abeyta highlight the importance of transparency and disclosure in the financial advisory industry. Investors have the right to know about any potential conflicts of interest that may influence the recommendations made by their financial advisors.
When advisors fail to disclose material information, such as higher commissions or bonuses, it can lead to recommendations that may not be in the best interest of the investor. This can result in suboptimal investment decisions and potential financial losses.
Investors should always be vigilant and ask questions about the incentives and compensation structures of their financial advisors. They should also review their investment portfolios regularly to ensure that the investments align with their goals and risk tolerance.
Red Flags and Recovering Losses
Investors should be aware of certain red flags that may indicate financial advisor malpractice, such as:
- Lack of transparency regarding commissions and incentives
- Recommendations that seem to prioritize the advisor’s interests over the client’s
- Pressure to make quick investment decisions without sufficient information
If investors suspect that they have been victims of financial advisor malpractice, they may be able to recover their losses through FINRA arbitration. Haselkorn & Thibaut, with over 50 years of experience and a 98% success rate, has helped numerous investors recover losses through this process.
Haselkorn & Thibaut operates on a “No Recovery, No Fee” basis, meaning that clients only pay if the firm successfully recovers their losses. Investors can contact the firm for a free consultation by calling their toll-free number: 1-888-885-7162 .
As the investigation into Chris Abeyta and his company continues, investors who believe they may have been affected by the alleged misconduct should consider seeking legal advice to protect their rights and explore their options for recovering any potential losses.
