In a recent development that has sent shockwaves through the investment community, a serious allegation has been leveled against John Hibshman, a registered representative associated with Lincoln Financial Advisors Corporation (CRD 3978) in Ohio. According to the disclosure filed on February 16, 2024, a customer has alleged that Hibshman recommended an unsuitable oil and gas investment, raising concerns about the advisor’s practices and the potential impact on investors.
The gravity of this allegation cannot be overstated, as it strikes at the core of the trust and confidence that investors place in their financial advisors. When an advisor recommends an investment that is not suitable for a client’s financial situation, risk tolerance, or investment objectives, it can lead to significant losses and undermine the client’s financial well-being. As the case unfolds, investors who have worked with John Hibshman or invested in oil and gas products through Lincoln Financial Advisors Corporation are likely to be closely monitoring the situation, seeking answers and assurances regarding the safety of their investments.
Understanding the allegation and FINRA Rule 2111
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At the heart of this case is the allegation that John Hibshman recommended an unsuitable oil and gas investment to a customer. In simpler terms, this means that the advisor may have suggested an investment that was not appropriate for the client’s specific financial circumstances, goals, or risk tolerance. FINRA Rule 2111, known as the “Suitability Rule,” requires financial advisors to have a reasonable basis for believing that a recommended investment or investment strategy is suitable for the customer, based on the customer’s investment profile.
The suitability of an investment is determined by factors such as the customer’s age, financial situation, investment experience, investment objectives, liquidity needs, and risk tolerance. If an advisor fails to consider these factors and recommends an unsuitable investment, it can be a violation of FINRA rules and a breach of the advisor’s fiduciary duty to the client.
The importance of suitability for investors
The suitability of investments is crucial for investors, as it directly impacts their financial well-being and the likelihood of achieving their investment goals. When an advisor recommends an unsuitable investment, it can expose the investor to excessive risk, lead to significant losses, and derail their financial plans. Unsuitable investments can be particularly damaging for investors who are nearing retirement, have limited financial resources, or have a low risk tolerance.
Moreover, the recommendation of unsuitable investments can erode the trust between investors and their advisors, making it difficult for investors to feel confident in the advice they receive and the decisions they make. This erosion of trust can have far-reaching consequences, as it may deter investors from seeking professional guidance in the future, potentially leading to missed opportunities or poor investment choices.
According to a study by the Financial Industry Regulatory Authority (FINRA), investment fraud and bad advice from financial advisors cost investors billions of dollars each year. In 2020 alone, FINRA reported that it had ordered firms and individuals to pay a total of $57.5 million in restitution to harmed investors, demonstrating the scale of the problem and the importance of holding advisors accountable for their actions.
Red flags and recovering losses
Investors should be vigilant for red flags that may indicate financial advisor malpractice, such as a lack of transparency, pressure to make quick investment decisions, or investments that seem inconsistent with their risk tolerance or financial goals. If an investor suspects that they have been the victim of unsuitable investment recommendations, it is essential to act promptly to protect their rights and recover any losses.
Haselkorn & Thibaut, a national investment fraud law firm with offices in Florida, New York, North Carolina, Arizona, and Texas, is currently investigating John Hibshman and Lincoln Financial Advisors Corporation in relation to this allegation. 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. The firm offers free consultations to clients and operates on a “No Recovery, No Fee” basis, ensuring that investors can seek justice without upfront costs. Investors who have suffered losses due to unsuitable investment recommendations can contact Haselkorn & Thibaut toll-free at 1-888-885-7162 for a free consultation.
As the case against John Hibshman and Lincoln Financial Advisors Corporation progresses, it serves as a reminder of the critical importance of suitability in investment recommendations. Investors must remain vigilant, ask questions, and thoroughly understand the risks and implications of any investment before proceeding. By working with experienced legal professionals like those at Haselkorn & Thibaut, investors can hold accountable those who breach their trust and seek the recovery of losses stemming from unsuitable investment recommendations.
