Michael Harris, a registered investment advisor, is currently facing allegations of breaching his fiduciary duty to a client. According to the customer dispute filed on January 25, 2024, the client claims that Harris liquidated stocks in their account on December 27, 2023, instead of October 16, 2023, as allegedly agreed upon. The client alleges that this delay in liquidation resulted in a tax liability of $34,256.
The complaint, filed with the Financial Industry Regulatory Authority (FINRA), was denied by Harris. The investment advisor, whose FINRA CRD number is 4699319, maintains his status as an investment advisor, although he is not currently registered as a broker.
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 Michael Harris. The firm, known for its extensive experience in handling investment fraud cases, offers free consultations to clients who may have been affected by Harris’ alleged misconduct.
Investment fraud and bad advice from financial advisors are unfortunately common occurrences. According to a Forbes article, the U.S. Securities and Exchange Commission (SEC) estimates that approximately $40 billion is lost annually due to investment fraud.
Understanding the Allegation and FINRA Rules
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The client’s complaint revolves around the concept of fiduciary duty, which is a legal obligation for investment advisors to act in the best interests of their clients. According to FINRA Rule 2111, also known as the “Suitability Rule,” investment advisors must have a reasonable basis to believe that their investment recommendations are suitable for their clients, taking into account factors such as the client’s financial situation, investment objectives, and risk tolerance.
In this case, the client alleges that Michael Harris breached his fiduciary duty by liquidating stocks in their account later than allegedly agreed upon. The delay, according to the complaint, resulted in a significant tax liability for the client.
The Importance of Timely Liquidation
The timing of stock liquidation can have significant implications for investors, particularly when it comes to tax liabilities. Capital gains taxes, which are levied on profits from the sale of investments, can vary depending on how long the investor held the assets before selling them.
Short-term capital gains, which apply to investments held for one year or less, are taxed at the investor’s ordinary income tax rate. Long-term capital gains, on the other hand, which apply to investments held for more than one year, are taxed at a lower rate. By allegedly failing to liquidate the client’s stocks on the agreed-upon date, Michael Harris may have exposed the client to a higher tax liability than necessary.
Why This Case Matters for Investors
The allegations against Michael Harris serve as a reminder of the importance of working with trustworthy and reliable investment advisors. Investors should be able to trust that their advisors will act in their best interests and follow through on agreed-upon strategies.
This case also highlights the potential consequences of an advisor’s actions on an investor’s financial well-being. A breach of fiduciary duty, such as the one alleged in this complaint, can result in significant financial losses for investors, including increased tax liabilities.
Investors who believe they have been victims of investment fraud or misconduct should be aware of their rights and options for seeking recourse. FINRA arbitration, for example, provides a forum for investors to seek compensation for losses resulting from their advisor’s misconduct.
Red Flags for Financial Advisor Malpractice
Investors should be vigilant in monitoring their investments and the actions of their financial advisors. Some red flags that may indicate potential malpractice include:
- Unauthorized trades or changes to investment strategies
- Failure to follow agreed-upon investment plans
- Lack of communication or transparency regarding investment decisions
- Excessive trading or churning of accounts to generate commissions
Seeking Legal Assistance for Investment Losses
Investors who suspect they have been victims of financial advisor malpractice should consider seeking legal assistance. Haselkorn & Thibaut, with over 50 years of combined experience and a 98% success rate, has a proven track record of helping investors recover losses through FINRA arbitration.
The firm operates on a “No Recovery, No Fee” basis, meaning clients only pay if a recovery is made on their behalf. Investors can contact Haselkorn & Thibaut for a free consultation by calling their toll-free number, 1-888-885-7162 .
The Importance of Choosing the Right Investment Fraud Law Firm
When seeking legal representation for investment fraud cases, it is crucial to choose a law firm with extensive experience and a proven track record of success. Haselkorn & Thibaut‘s national presence, with offices in multiple states, allows them to serve clients across the country.
Their team of experienced attorneys is well-versed in navigating the complexities of FINRA arbitration and has a deep understanding of the financial industry. By choosing a reputable and skilled law firm like Haselkorn & Thibaut, investors can increase their chances of recovering losses and holding negligent advisors accountable for their actions.
