John Dewitt, a broker and investment advisor associated with Ausdal Financial Partners, Inc. (CRD 7995) in Illinois, is currently facing allegations of unsuitable investments, misleading recommendations, and negligent due diligence. The customer dispute, filed on January 18, 2024, is currently pending resolution and involves GWG L Bonds.
Investment fraud and bad advice from financial advisors can have devastating consequences for investors. According to a Forbes article, investment fraud costs Americans billions of dollars each year, with the elderly being particularly vulnerable to such schemes.
Understanding the Allegations and FINRA Rules
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The allegations against John Dewitt revolve around three main issues: unsuitable investments, misleading recommendations, and negligent due diligence. Unsuitable investments occur when a broker or advisor recommends products that do not align with the investor’s risk tolerance, financial goals, or investment objectives. Misleading recommendations involve providing inaccurate or incomplete information about an investment product, leading to misinformed decisions. Negligent due diligence refers to the failure of a broker or advisor to thoroughly research and understand the risks and characteristics of an investment product before recommending it to clients.
FINRA Rule 2111, known as the “Suitability Rule,” requires brokers and advisors to have a reasonable basis for believing that a recommended transaction or investment strategy is suitable for the customer, based on the customer’s investment profile. This profile includes factors such as age, financial situation, investment objectives, and risk tolerance. By allegedly recommending unsuitable investments and providing misleading information, John Dewitt may have violated this rule.
The Impact on Investors
Unsuitable investments and misleading recommendations can have severe consequences for investors. When an investor’s portfolio is not aligned with their risk tolerance or financial goals, they may experience significant losses or miss out on potential gains. Misleading information can lead to investors making decisions based on inaccurate or incomplete data, further compounding the risk of financial harm.
Negligent due diligence can also expose investors to unnecessary risks. When a broker or advisor fails to thoroughly research an investment product, they may overlook critical information that could impact the investor’s decision-making process. This lack of due diligence can result in investors being exposed to products that are far riskier than they anticipated or that do not suit their financial needs.
Protecting Yourself from Financial Advisor Malpractice
Investors can take several steps to protect themselves from financial advisor malpractice:
- Conduct thorough research on potential brokers and advisors, including checking their background and disciplinary history through FINRA’s BrokerCheck tool.
- Ask questions and seek clarification about investment recommendations, ensuring that you fully understand the risks and potential rewards.
- Diversify your portfolio to minimize the impact of any single unsuitable investment.
- Regularly review your account statements and question any discrepancies or unexpected changes.
If you suspect that you have been a victim of financial advisor malpractice, it is crucial to seek legal guidance from experienced professionals. Haselkorn & Thibaut, a national investment fraud law firm with offices in Florida, New York, North Carolina, Arizona, and Texas, is currently investigating John Dewitt and Ausdal Financial Partners, Inc. The firm offers free consultations to clients and operates on a “No Recovery, No Fee” policy.
With over 50 years of combined experience and a 98% success rate, Haselkorn & Thibaut has a proven track record of helping investors recover losses through FINRA arbitration. If you have suffered losses due to the alleged misconduct of John Dewitt or any other financial advisor, contact Haselkorn & Thibaut at 1-888-885-7162 to discuss your legal options.
