Investment fraud is a serious matter that can result in substantial financial losses for investors. In recent news, an advisor named Gina Francisco, associated with LPL Financial LLC, is under investigation by Haselkorn & Thibaut, a national investment fraud law firm with offices in Florida, New York, North Carolina, Arizona, and Texas. The case involves an allegation made by a customer who claims that the advisor made an unsuitable recommendation of an alternative investment in February 2013, resulting in an alleged loss of $75,000.
Allegation’s Seriousness and Case Information
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The seriousness of this allegation cannot be understated. The customer claims that the advisor recommended an investment that was not suitable for their financial situation and investment goals. The advisor’s response to the allegation was that a detailed review of the customer’s financials, investment experience, and investment objective was completed, and that the customer was aware of the lack of liquidity and risk of loss of principal. The advisor denies all allegations stating that the damages are without merit.
The case, numbered 23-02589, is currently pending and was filed on September 22, 2023. The dispute involves an alternative investment, a type of investment that falls outside of traditional asset classes like stocks, bonds, and cash. These investments can include real estate, commodities, hedge funds, and private equity, among others.
Explanation in Simple Terms and the FINRA Rule
The Financial Industry Regulatory Authority (FINRA) is a self-regulatory organization that oversees brokerage firms and their registered representatives. Under FINRA Rule 2111, brokers are required to have a reasonable basis to believe that a recommended transaction or investment strategy involving a security or securities is suitable for the customer. This is based on the information obtained through reasonable diligence to ascertain the customer’s investment profile.
In simpler terms, advisors are required to understand their client’s financial situation, investment experience, and investment objectives before recommending an investment. If the advisor fails to do this and recommends an unsuitable investment, they can be held liable for any losses the investor may incur.
Why It Matters for Investors
Investors trust their financial advisors to provide them with sound investment advice that aligns with their financial goals and risk tolerance. When an advisor fails to fulfill their fiduciary duty and recommends unsuitable investments, it can result in significant financial losses for the investor.
Investors should be aware of the potential risks associated with alternative investments, which can include lack of liquidity, high fees, and potential loss of principal. These risks should be thoroughly explained by the advisor, and the investor should feel comfortable with the investment before proceeding.
Red Flags for Financial Advisor Malpractice and How Investors Can Recover Losses
There are several red flags that investors should be aware of that could indicate financial advisor malpractice. These can include frequent trading, unsuitable investment recommendations, failure to disclose risks, and unauthorized trading. If an investor suspects that they have been a victim of investment fraud or malpractice, they should immediately contact a law firm that specializes in investment fraud.
Haselkorn & Thibaut is one such firm with over 50 years of experience in helping investors recover their losses. They have a 98% success rate and offer a “No Recovery, No Fee” policy. Investors can contact them for a free consultation at their toll-free number, 1-800-856-3352.
Investors can also seek recourse through FINRA Arbitration, a dispute resolution process that is faster and less formal than court litigation. Haselkorn & Thibaut can represent investors in FINRA Arbitration to help them recover their losses.
Investment fraud is a serious issue that can result in substantial financial losses. Investors should be aware of the risks and red flags associated with investment fraud and seek professional help if they suspect they have been a victim. Haselkorn & Thibaut is dedicated to helping investors recover their losses and holding financial advisors accountable for their actions.
