The seriousness of allegations in the financial sector should never be underestimated. Recently, a case involving a financial advisor, John Bussa, and his former employer, LINCOLN FINANCIAL ADVISORS CORPORATION, has come to light. The case revolves around a customer dispute that is currently pending, with the claimant alleging that Bussa recommended an overconcentration of an illiquid non-traded REIT investment. Furthermore, the claimant alleges that Bussa advised holding the position when a 3rd party tender offer was available, and the investment is now worth significantly less. The total amount of the claim is $45,000. (FINRA CRD number: 4418922)
The Allegation Explained and the FINRA Rule
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In simpler terms, the claimant accuses Bussa of recommending an investment strategy that involved putting too much money into a single, non-traded REIT. This type of investment is considered illiquid, meaning it can’t be easily sold or converted into cash. The claimant also alleges that Bussa advised against selling the investment when a third-party tender offer was available. As a result, the investment’s value has decreased significantly.
This case potentially involves a violation of the Financial Industry Regulatory Authority (FINRA) Rule 2111, which requires brokers to have a reasonable basis for recommending a series of transactions, even if suitable when viewed in isolation, are not excessive and unsuitable for the investor when taken together in light of the investor’s investment profile.
Why This Matters for Investors
Investors trust their financial advisors to act in their best interests. When a financial advisor fails to do so, it can result in significant financial losses. Cases like this underscore the importance of understanding the recommendations made by financial advisors and being aware of the risks associated with different types of investments.
This case also highlights the importance of diversification in an investment portfolio. Overconcentration in a single investment can lead to significant losses if that investment performs poorly.
Red Flags for Financial Advisor Malpractice and Recovering Losses
Investors should be aware of certain red flags that may indicate financial advisor malpractice. These include recommendations for overconcentration in a single investment, pressure to hold onto an investment despite a decrease in value, and failure to explain the risks associated with an investment.
If an investor believes they have been a victim of financial advisor malpractice, they can take steps to recover their losses. This includes filing a claim with FINRA Arbitration, which can help investors recover losses caused by financial advisor malpractice.
Haselkorn & Thibaut, a national investment fraud law firm with offices in Florida, New York, North Carolina, Arizona, and Texas, is currently investigating the advisor and company involved in this case. With over 50 years of experience and a 98% success rate, Haselkorn & Thibaut has successfully recovered financial losses for investors across the country. They offer free consultations and operate on a “No Recovery, No Fee” policy. Contact them at their toll-free number, 1-800-856-3352, for a free consultation.
