In a recent case, a serious allegation has been made against financial advisor John Bennett of First Citizens Investor Services, Inc. and Wells Fargo Clearing Services, LLC (CRD 19616). The customer alleged that the structured note purchased through Bennett was not liquid, preventing the customer from taking their required minimum distribution for 2022 and beyond. The case, which settled on August 14, 2023, resulted in a settlement of $35,530 out of the claimed $38,000.
This case highlights the potential risks investors face when purchasing complex financial products, such as structured notes. Liquidity issues can have severe consequences, especially for investors who rely on their investments for income or have specific financial obligations, such as required minimum distributions. Investment fraud and bad advice from financial advisors can lead to significant losses for unsuspecting investors.
Haselkorn & Thibaut, a national investment fraud law firm, is currently investigating John Bennett and the associated companies in relation to this allegation. Investors who have suffered losses due to illiquid investments or other forms of financial advisor misconduct are encouraged to contact Haselkorn & Thibaut for a free consultation.
Understanding the FINRA rule violation
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The allegation against John Bennett suggests a potential violation of FINRA rules, specifically related to the suitability of investments. FINRA Rule 2111 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, risk tolerance, and liquidity needs.
Suitability and liquidity considerations
When recommending structured notes or other complex products, financial advisors must consider the liquidity needs of their clients. Failing to do so can result in significant financial harm, as demonstrated in this case, where the customer was unable to access funds for their required minimum distribution.
The importance of investor awareness
This case underscores the importance of investor awareness and due diligence when working with financial advisors. Investors should thoroughly understand the products they are investing in, including potential liquidity risks and how these investments align with their financial goals and needs.
Red flags for financial advisor misconduct
Investors should be vigilant for red flags that may indicate financial advisor misconduct, such as:
- Recommending unsuitable investments that do not align with the investor’s risk tolerance or financial objectives
- Failing to disclose material information about an investment’s risks or liquidity constraints
- Misrepresenting the characteristics or performance of an investment
Recovering losses through FINRA arbitration
Investors who have suffered losses due to financial advisor misconduct may be able to recover their losses through FINRA arbitration. Haselkorn & Thibaut has extensive experience representing investors in FINRA arbitration proceedings, with a proven track record of success in helping clients recover their losses.
Why choose Haselkorn & Thibaut?
Haselkorn & Thibaut is a premier investment fraud law firm with over 50 years of combined experience and a 98% success rate in helping investors recover their losses. With offices in Florida, New York, North Carolina, Arizona, and Texas, the firm is well-positioned to serve clients nationwide. Haselkorn & Thibaut operates on a contingency basis, meaning clients pay no fees unless a recovery is secured.
For a free consultation with Haselkorn & Thibaut, investors can call their toll-free number at 1-888-885-7162 or visit their website to learn more about their services and track record of success.
Investors who have worked with John Bennett or invested in structured notes through First Citizens Investor Services, Inc. or Wells Fargo Clearing Services, LLC are urged to contact Haselkorn & Thibaut to discuss their legal options and potential recovery of losses.
