Kelly Hubrig, a broker and investment advisor associated with LPL Financial LLC, is currently facing allegations from a customer who claims they were sold an illiquid investment despite wanting access to their funds. The complaint, filed on February 14, 2024, is currently pending resolution and involves a real estate security.
According to the disclosures on Hubrig‘s FINRA BrokerCheck report (CRD #4636268), the customer alleges that they requested access to their funds but were instead sold an illiquid investment, which may have limited their ability to withdraw or access their money when needed. The specific details of the investment and the circumstances surrounding the sale are not provided in the disclosure.
Illiquid investments can pose significant risks to investors, as they may be difficult to sell quickly or at a fair price, leaving investors with limited access to their funds for extended periods. Investopedia defines illiquid investments as those that cannot be easily converted into cash without a substantial loss in value due to the lack of ready and willing investors or speculators to purchase the asset.
Understanding FINRA rules and the importance of liquidity
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FINRA Rule 2111, known as the “Suitability Rule,” requires brokers and investment 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 the customer’s age, financial situation, investment objectives, and risk tolerance.
If a broker or advisor recommends an illiquid investment to a customer who has expressed a need for liquidity or access to their funds, it may be considered a violation of the Suitability Rule. Advisors must ensure that their recommendations align with their clients’ needs and goals.
Investors should be aware of the potential risks associated with illiquid investments, including:
- Difficulty in selling the investment quickly or at a fair price
- Limited access to funds for extended periods
- Potential for significant losses if forced to sell in a down market
Recognizing red flags and seeking help
Investors who believe they have been misled or sold unsuitable investments by their financial advisors should be aware of potential red flags, such as:
- Recommendations that do not align with the investor’s stated goals or risk tolerance
- Pressure to invest quickly or in a specific product
- Lack of transparency regarding fees, risks, or liquidity restrictions
Investment fraud and bad advice from financial advisors can have devastating consequences for investors. According to a Bloomberg article, FINRA ordered record financial penalties against Robinhood in 2021 for violating rules related to investor protection and market integrity.
If an investor suspects misconduct or unsuitable investment advice, they may have the right to recover their losses through FINRA arbitration. Haselkorn & Thibaut, a national investment fraud law firm with offices in Florida, New York, North Carolina, Arizona, and Texas, is currently investigating Kelly Hubrig and LPL Financial LLC in relation to this pending customer dispute.
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 operates on a contingency fee basis, meaning clients pay no fees unless a recovery is secured.
Investors who have worked with Kelly Hubrig or LPL Financial LLC and believe they may have been sold unsuitable investments are encouraged to contact Haselkorn & Thibaut for a free consultation by calling 1-888-885-7162 .
